An ordinal theorem of the maximum

Marek Weretka

No 61, GRAPE Working Papers from GRAPE Group for Research in Applied Economics

Abstract: This paper extends the notion of equivalent variation, Hicks (1939) to an abstract decision problem. It also provides a modern, ordinal variant of the maximum theorem, Berge (1963) that formulates the assumptions in terms of underlying preferences and demonstrates the continuity of the classic preference-based welfare indices (i.e., the equivalent and compensating variations) as well as the upper hemicontinuity of the choice correspondence. We then apply the theorem to the relevant economic problems.

Keywords: Maximum Theorem; equivalent variation; ordinal convergence (search for similar items in EconPapers)
JEL-codes: D43 D53 G11 G12 L13 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2021
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:fme:wpaper:61

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