On the utility representation of asymmetric single-peaked preferences
We introduce two natural types of asymmetric single-peaked preferences, which we name biased-above and biased-below, depending on whether the asymmetry (or preference-bias) favors alternatives above or below the peak. We de.ne a rich family of utility functions, the generalized distance-metric utility functions, that can represent preferences biased-above or biased-below, besides accommodating any degree of asymmetry. We also identify restrictions on differentiable utility representations that guarantee the underlying preferences to be biased-above or below, and allow to compare degrees of asymmetry. Finally, we consider a specific application -agents preferences over government size- to illustrate the role of factors such as risk aversion and tax distortions in shaping asymmetric preferences.
|Date of creation:||Jan 2011|
|Date of revision:||Jul 2011|
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- Ruge-Murcia, Francisco J, 2003.
" Inflation Targeting under Asymmetric Preferences,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 35(5), pages 763-785, October.
- RUGE-MURCIA, Francisco .J., 2001. "Inflation Targeting Under Asymmetric Preferences," Cahiers de recherche 2001-04, Universite de Montreal, Departement de sciences economiques.
- Francisco J. Ruge-Murcia, 2001. "Inflation Targeting Under Asymmetric Preferences," Working Papers 0106, Banco de España;Working Papers Homepage.
- Ruge-Murcia, F.J., 2001. "Inflation Targeting Under Asymmetric Preferences," Cahiers de recherche 2001-04, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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