Updating Utility Functions on Preordered Sets

Abstract

We consider the problem of extending a function fP defined on a subset P of an arbitrary set X to X strictly monotonically with respect to a preorder ≽ defined on X , without imposing continuity constraints. We show that whenever ≽ has a utility representation, fP is extendable if and only if it is gap-safe increasing. This property means that whenever x′≻x, the infimum of fP on the upper contour of x′ exceeds the supremum of fP on the lower contour of x, where x, x′∈X˜ and X˜ is X completed with two absolute ≽-extrema and, moreover, fP is weakly increasing. The completion of X makes the condition sufficient. The proposed method of extension is flexible in the sense that for any bounded utility representation u of ≽, it provides an extension of fP that coincides with u on a region of X that includes the set of P-neutral elements of X . An analysis of related topological theorems shows that the results obtained are not their consequences. The necessary and sufficient condition of extendability and the form of the extension are simplified when P is a Pareto set.

Keywords

• extension of utility functions
• monotonicity
• utility representation of a preorder
• lifting theorems