Question

Understanding preference assumptions

Complete the following table by identifying which assumption each given scenario references.
Assumptions
Scenario Complete Transitive
Tastes Tastes Monotonicity Convexity Continuity
Your niece Latasha says she
can't compare her two favorite
TV shows, Dora the Explorer
and Sesame Street, because
they are so different, even though
they are on at the same time and
she needs to choose.
Jake usually buys three pounds
of ham and two pounds of turkey
each week at the grocery store.
When the grocery store had only
1.99 pounds of turkey available,
he didn't feel that worse off.
Your brother would prefer to have
two computers and a video game
console, rather than one computer
and a video game console, because
he loves technology.
Frances is indifferent between having
only two scoops of ice cream or having
only four cookies for dessert, but she
would prefer to have one scoop of ice
cream and two cookies because she
likes variety in her diet.
Dmitri prefers burgers over hot dogs
and hot dogs over chicken. However,
when faced with a choice between
burgers and chicken, he chooses
chicken.

Answer 1

Understanding Preference Assumptions

Identifying the assumption for each scenario:

Scenario Preference Assumption

1. Your niece Latasha says she

can't compare her two favorite

TV shows, Dora the Explorer

and Sesame Street, because

they are so different, even though

they are on at the same time and

she needs to choose. Continuity

2. Jake usually buys three pounds

of ham and two pounds of turkey

each week at the grocery store.

When the grocery store had only

1.99 pounds of turkey available,

he didn't feel that worse off. Complete taste

3. Your brother would prefer to have

two computers and a video game

console, rather than one computer

and a video game console, because

he loves technology. Monotonicity

4. Frances is indifferent between having

only two scoops of ice cream or having

only four cookies for dessert, but she

would prefer to have one scoop of ice

cream and two cookies because she

likes variety in her diet. Convexity

5. Dmitri prefers burgers over hot dogs

and hot dogs over chicken. However,

when faced with a choice between

burgers and chicken, he chooses

chicken. Transitive tastes

Step-by-step explanation:

A. Complete taste: As Jake's preferences are inclined towards ham, she is able to compare and rank ham and turkey.

B. Continuity: There are sudden jumps in Latasha's taste. She wants her two favorite TV shows, Dora the Explorer and Sesame Street, equally.

C. Transitive tastes: For example, Dmitri prefers burgers over hot dogs

and hot dogs over chicken, but still chooses chicken.

D. Monotonicity: More computers are better for my brother.

E. Convexity: Averages of (ice cream and cookies) are better than only ice cream or only cookies For Frances.