In microeconomic theory and decision theory, the Mixture-space theorem is a utility-representation theorem for preferences defined over general mixture spaces. The theorem generalizes the von Neumann–Morgenstern utility theorem and the usual utility-representation theorem for consumer preferences over R n {\displaystyle \mathbb {R} ^{n}} . It was first proven by Israel Nathan Herstein and John Milnor in 1953, together with the introduction of the definition of a mixture space.
Mixture spaces
Definition Mixture spaces, as introduced by Herstein and Milnor, are a generalization of convex sets from vector spaces. Formally: Definition: A mixture space is a pair ( X , h ) {\displaystyle (X,h)} , where
X {\displaystyle X} is just any set, and
h : [ 0 , 1 ] × X × X → R {\displaystyle h:[0,1]\times X\times X\to \mathbb {R} } is a mixture function: it associates with each α ∈ [ 0 , 1 ] {\displaystyle \alpha \in [0,1]} and each pair x , y ∈ X × X {\displaystyle x,y\in X\times X} the α {\displaystyle \alpha } -mixture of the two, h α ( x , y ) ≡ h ( α , x , y ) {\displaystyle h_{\alpha }(x,y)\equiv h(\alpha ,x,y)} , such that
h 1 ( x , y ) = x {\displaystyle h_{1}(x,y)=x} .
h α ( x , y ) = h 1 − α ( y , x ) {\displaystyle h_{\alpha }(x,y)=h_{1-\alpha }(y,x)} .
h α ( h β ( x , y ) , y ) = h α β ( x , y ) {\displaystyle h_{\alpha }(h_{\beta }(x,y),y)=h_{\alpha \beta }(x,y)} . Mixture spaces are essentially a special case of convex spaces (also called barycentric algebras), where the mixing operation is restricted to be over [ 0 , 1 ] {\displaystyle [0,1]} and not just an appropriately closed subset of a semiring.
Examples Some examples and non-examples of mixture spaces are:
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