Economics Asked by megg on June 27, 2021
Can preference be convex when utility is not a concave function (e.g. $U=x_1^2 + x_2^2$)?
It's well known that a convex preference implies quasiconcave utility functions. Since quasiconcavity need not imply concavity, it's easy to find examples of a non-concave utility function representing a convex preference.
For example: $u(x,y)=(x+y)^3$. The preference this function represents is convex (though not strictly so), as can be seen from its linear indifference curves. The function is quasiconcave, as evidenced by the convex upper contour sets. Lastly, the function is not concave, as betrayed by the exponent.
Answered by Herr K. on June 27, 2021
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