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Topic: Local nonsatiation and bliss point
Conf: Chapter 1, Consumer Theory, Msg: 11258
From: Sung Ko Li (skli@hkbu.edu.hk)
Date: 9/3/2002 05:32 AM
Local nonsatiation and bliss point Sung Ko Li skli skli@hkbu.edu.hk
Let X be a consumption bundle. The assumption of local nonsatiation means that it is possible for a consumer to prefer a bundle that is strictly smaller than X. It does not guarantee that a consumer always prefer less of all goods. Obviously, a bliss point violates the assumption of local nonsatiation because no bundle can be preferred to that point. Indeed, if a consumer always prefers less, then the origin is the bliss point. Thus this behavior is inconsistent with local nonsatiation.