Why Indifference Curves Can't Cross

This video explains why a set of indifference curves for an economically rational individual cannot cross.

By Jodi Beggs - Economists Do It With Models

[-LSC]

Thank you! Also, we could say that the intersection point will have a utility value of both IC1's and IC2's which will violate the property of U being constant.

[armangurcell]

Oh my God, thanks for your explanation! Professors tend to make everything far more complicated than it actually needs to be.

[jodiecongirl]

I can't tell if you are serious, but I'm very curious. :) This issue comes up in behavioral economics, actually, since a researcher can elicit different (crossing) indifference curves depending on whether he asks about exchanging items for money (i.e. selling) or money for items (i.e. buying). The whole point of that exercise, however, is that the behavior isn't "rational."

[gracepeck]

I’ve heard people say it also breaks the more is better rule? Is that true?

[DrumsBah]

In prospect theory you can see them cross. Agents not endowed with either of 2 goods A and B display a value function of indifference  v(+good A) ≈ v(+good B) but Agents endowed with say good A and given the opportunity to exchange for good B display the endowment effect such that  v(+good B) < −v(−good A). So −v(−good A)>v(+good A), and because this applies to agents endowed with good B also, then the curves would cross. Though I suppose this is more of a descriptive model than a rational normative one.

[TubeYouG]

Hi.. Just wanna ask.. Other than the transitivity property you just mentioned above, is there another property on why indifference curves cannot intersect? Thanks! Love your videos btw!

[FroodTooth]

Thank you! This is simple enough to comprehend!

[shivadurgaprasadgujjari]

if this is a case u(B) = u(A), u (B)=u(C) then u(A) =u(B) =u(C) can they cross or one over other

[JYDIVISN]

Your videos are so awesome! Definitely a big help.

[sheetal]

please make videos on choice under uncertainty and monopoly market

[hariomsingh]

this video is helpul for me to understand the concept of IC

[lovelystar]

Thanks! Definitely help me in my work!

[mconnaghan]

I try not to be serious unless absolutely necessary. In this case, I'm not a student, therefore I can do anything I want. MWAAAHAHA! Mostly I was taking a dig at politics.

BUT: Yes, I'm on board with the concept that people are often not rational. I'm interested in learning more about behavioral economics. But like I said, I'm not a student, therefore I am not going to study. OTOH, I am also not going to attend any parties. Or socialize at all, really. My life is sad.

[mconnaghan]

Students: Note that indifference curves can cross in your political science class. Basically, anything goes over there.

[firemotivation]

Nice Video of Ic curve i am from india at West bengal

[afrikaasantiago]

Orange, banana and apple? Smells like Mas Colell here...