Preference (also called "taste" or "penchant") is a concept, used in the social sciences, particularly economics. Taste in the general sense is the same as Preference. Taste is also a sociological concept in that it is not just personal but subject to Social pressures The social sciences comprise academic disciplines concerned with the study of the social life of human groups and individuals including Anthropology, Communication studies Economics is the social science that studies the production distribution, and consumption of goods and services. It assumes a real or imagined "choice" between alternatives and the possibility of rank ordering of these alternatives, based on happiness, satisfaction, gratification, enjoyment, utility they provide. Happiness is an Emotion associated with feelings ranging from contentment and satisfaction to Bliss and intense Joy. Gratification is the positive emotional response ( Happiness) to a fulfillment of desire In Economics, utility is a measure of the relative satisfaction from or desirability of Consumption of various Goods and services. More generally, it can be seen as a source of motivation. Motivation is the reason or reasons for engaging in a particular behavior especially Human behavior as studied in Philosophy, Conflict, Economics In cognitive sciences, individual preferences enable choice of objectives/goals.
Also, more consumption of a normal good is generally (but not always) assumed to be preferred to less consumption.
In microeconomics, preferences of consumers and other entities are modelled with preference relations. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets
Let S be the set of all "packages" of goods and services (or more generally "possible worlds"). Then ≤ is a preference relation on S if it is a binary relation on S such that a ≤ b if and only if b is at least as preferable as a. In Mathematics, a binary relation (or a dyadic or 2-place relation) is an arbitrary association of elements within a set or with elements of It is conventional to say "b is weakly preferred to a", or just "b is preferred to a". If a ≤ b but not b ≤ a, then the consumer strictly prefers b to a, which is written a < b. If a ≤ b and b ≤ a then the consumer is indifferent between a and b. Strict weak ordering|Total_preorders|weak order (or total preorder)}}.
Completeness is more philosophically questionable. In most applications, S is an infinite set and the consumer is not conscious of all preferences. For example, one does not have to make up one's mind about whether one prefers to go on holiday by plane or by train if one does not have enough money to go on holiday anyway (although it can be nice to dream about what one would do if one would win the lottery). However, preference can be interpreted as a hypothetical choice that could be made rather than a conscious state of mind. In this case, completeness amounts to an assumption that the consumer can always make up their mind whether they are indifferent or prefer one option when presented with any pair of options.
Behavioral economics investigates the circumstances when human behavior is consistent and inconsistent with these assumptions. Behavioral economics and behavioral finance are closely related fields which apply scientific research on human and social cognitive and emotional factors to better
The indifference relation ~ is an equivalence relation. In Mathematics, an equivalence relation is a Binary relation between two elements of a set which groups them together as being "equivalent" Thus we have a quotient set S/~ of equivalence classes of S, which forms a partition of S. In Mathematics, given a set X and an Equivalence relation ~ on X, the equivalence class of an element a in X In Mathematics, given a set X and an Equivalence relation ~ on X, the equivalence class of an element a in X In Mathematics, a partition of a set X is a division of X into non-overlapping " parts " or " blocks " Each equivalence class is a set of packages that is equally preferred. If there are only two commodities, the equivalence classes can be graphically represented as indifference curves. In Microeconomic theory, an indifference curve is a graph showing different bundles of goods, each measured as to quantity between which a consumer Based on the preference relation on S we have a preference relation on S/~. As opposed to the former, the latter is antisymmetric and a total order. In Mathematics, a Binary relation R on a set X is antisymmetric if for all a and b in X, if In Mathematics and Set theory, a total order, linear order, simple order, or (non-strict ordering is a Binary relation
It is usually more convenient to describe a preference relation on S with a utility function , such that u(a) ≤ u(b) if and only if a ≤ b. In Economics, utility is a measure of the relative satisfaction from or desirability of Consumption of various Goods and services. ↔ A continuous utility function always exists if ≤ is a continuous rational preference relation on Rn. In Mathematics, a continuous function is a function for which intuitively small changes in the input result in small changes in the output For any such preference relation, there are many continuous utility functions that represent it. Conversely, every utility function can be used to construct a unique preference relation.
All the above is independent of the prices of the goods and services and independent of the budget of the consumer. These determine the feasible packages (those he or she can afford). In principle the consumer chooses a package within his or her budget such that no other feasible package is preferred over it; the utility is maximized.
Sometimes symbols like are used as a reminder that equivalence is not necessarily equality.