A new class of smooth preference relations that contains G. Debreu′s Smooth Preferences (Econometrica40, 1972, 603-615) as a closed and nowhere dense subset is defined. Every preference in this class, which we call Non-transitive Smooth Preferences (P1), generates a smooth demand function that satisfies the Weak Axiom and a number of other properties. We characterize the set of demand functions generated by P1 and prove that it is an open subset of the space of smooth demand functions. Journal of Economic Literature Classification Numbers: C60, D11.
ASJC Scopus subject areas
- Economics and Econometrics