X = [0,1] i.e.

, X compact ; f discontinuous 100

50

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

X = (0,1] i.e., X not compact; f continuous 100

50

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

X = [0,1] i.e., X compact; f continuous 100

50

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Figure 1. Compactness plus continuity implies boundedness

() August 18, 2013 1 / 14

x) xn )

f (x) O f (xn )

xn x

f 1(S )

)X

xn x

W
f 1(O)

if part of the proof (contra-positive) f continuous, f 1 (S ) not open implies S not open

only if part of the proof (contra-positive) f discontinuous, O open, f 1 (O) not open

Figure 1. f is continuous i S open = f 1 (S ) open

() August 18, 2013 2 / 14

Continuity & Hemi-continuity defns: continuity

1(a) Inverse image formulation of continuity. A function f : X Y is called continuous if for every open set O Y , f 1 (O ) is an open set of X . 1(b) Neighborhood formulation of continuity. A function f : X Y is called continuous if for every x X and every such that f (x ) U for neighborhood U of f (x ) there is a neighborhood V of x every x V . 1(c) Sequential formulation of continuity. A function f : X Rn is called continuous at x0 X if whenever {xm } m=1 converges x0 then {f (xm )} converges to f (x0 ); the function f is continuous if it is continuous at x for every x X .
() August 18, 2013 3 / 14

Continuity & Hemi-continuity defns: upper hemi-continuity

2(a) Inverse image formulation of upper hemicontinuity. A correspondence : S T is called upper hemicontinuous if for every open set O T , the upper inverse image of O under , Explosions allowed; implosions are not
1

(O ) S , is an open set.

2(b) Neighborhood formulation of upper hemicontinuity. A correspondence : S T is called upper hemicontinuous if for every s S and every neighborhood U of (s) there is a neighborhood V of s such that (s) U for every s V . 2(c) Sequential formulation of upper hemicontinuity. A compact-valued correspondence : S T is called upper hemicontinuous if for every s S , every sequence {sn } converging to s and every sequence {tn } with tn (sn ), there is a convergent subsequence {tnk } of {tn } such that lim tnk = t (s).
n
() August 18, 2013 4 / 14

Continuity & Hemi-continuity defns: lower hemi-continuity

3(a) Inverse image formulation of lower hemicontinuity. A correspondence : S T is called lower hemicontinuous if for every open 1 set O T , the lower inverse image of O under , (O ) S , is an open set. Implosions allowed; explosions are not 3(b) Neighborhood formulation of lower hemicontinuity. A correspondence : S T is called lower hemicontinuous if for every s S , / , there exists a neighborhood V of and every open set U T with U (s) = 0 / , for every z V . s such that U (z ) = 0 3(c) Sequential formulation of lower hemicontinuity. A correspondence : S T is called lower hemicontinuous if for every s S , any t (s), and any sequence {sn } converging to s, there exists a sequence {tn } such that tn (sn ) and lim tn = t .
n
() August 18, 2013 5 / 14

Explosions, Implosions and Hemi-continuity

The graph of a correspondence: Graph()

{(s, t ) S T : t (s)}

The outer accumulation of a correspondence.

OAc (s)

{t T : (s, t ) is an accumulation point of Graph()}

The inner accumulation of a correspondence.

IAc (s)

{t T : {sn } s, {tn } s.t. n, tn (sn ) and {tn } t } IAc (s). (s).

Denition: explodes at s if (s)

Denition: implodes at s if OAc (s)

Theorem: If : S T , T is compact and is compact-valued, then is u.h.c at s iff does not implode at s Theorem: is l.h.c at s iff does not explode at s
() August 18, 2013 6 / 14

1 (O ) Figure 3. Upper and Lower inverse images of

( )
( ) ( 1 (O ) )
() August 18, 2013 7 / 14

u 1 ((1, 2)) = {0} closed 1 ((1, 2)) = u

((1, 1)) = {0} closed 1 ((1, 1)) = R

u is uhs but not lhc

is lhc but not uhc

(1,2)

(0,0)

(0,0)

x Figure 4. u and

()

August 18, 2013

(1,1)
8 / 14

) )
0 z w y

(
x
1

Figure 5. : [0, 1] R
() August 18, 2013 9 / 14

) )
0 vz w y

(
x
1

Figure 6. : [0, 1] R
() August 18, 2013 10 / 14

Berges Theorem
Berges Theorem of the Maximum: If : X Y is a continuous correspondence with nonempty and compact values and : Y R is a continuous function, then y : X Y dened by y (x ) = argmaxy (x ) (y ) is u.h.c. and : X R dened by (x ) = maxy (x ) (y ) is a continuous function. For our purposes, think of: X as a space of price vectors Y as a space of commodity vectors

as a budget correspondence, continuous, compact-valued as a utility function, continuous

y as a demand correspondence. Result: its u.h.c.

as an indirect utility function. Result: its continuous

(Ill add u to the pics, its a direct utility function)
() August 18, 2013 11 / 14

Berges theorem: Introduction

.5 1 2

P =

x1 x2

y2

y2

y2y (2)

1111111111 0000000000 0000000000 1111111111 0000000000 1111111111 0000000000 1111111111 0000000000 1111111111 y (0.5) (0.5) 0000000000 1111111111 0000000000 1111111111 0000000000 1111111111 y1

1111111 0000000 0000000 1111111 0000000 1111111 0000000 1111111 0000000 1111111 0000000 1111111 0000000 1111111 0000000 1111111 (1) 0000000 1111111 0000000 1111111
y (1)

y1

11111 00000 00000 11111 00000 11111 00000 11111 00000 11111 00000 11111 00000 11111 00000 11111 00000 11111 (2) 00000 11111 00000 11111 00000 11111

Figure 7. The demand correspondence is u.h.c

() August 18, 2013 12 / 14

y1

Berges theorem: Role of upper-hemi-continuity

(
(y ) = (x) U = 1 (O)

y V = 1 (U ) x

O (nbd of (x))

(
R

inf(O)

(x )

(x)

Y Figure 1. Lower hemi-continuity of implies that (x ) > inf(O).

()

August 18, 2013

13 / 14

Berges theorem: Role of upper-hemi-continuity

sup(O)

( (

1 (U h ) Vh =

(y ) = (x)

U h = 1 (O ) (x)

}
( (
R

O (nbd of (x))

O (nbd of ((x))

O = O O

Figure 2. Upper hemi-continuity of implies that (x ) < sup(O).

()

August 18, 2013

14 / 14