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On the utility representation of asymmetric single-peaked preferences

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  • Francisco Martinez Mora
  • M. Socorro Puy

Abstract

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.

Suggested Citation

  • Francisco Martinez Mora & M. Socorro Puy, 2011. "On the utility representation of asymmetric single-peaked preferences," Discussion Papers in Economics 11/18, Division of Economics, School of Business, University of Leicester, revised Jul 2011.
    • Handle: RePEc:lec:leecon:11/18
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    References listed on IDEAS

    as
    1. 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.
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    More about this item

    Keywords

    Single-peaked preferences; asymmetric preferences; quadratic preferences; risk aversion; prudence;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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