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Multiperson utility

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  • Baucells, Manel
  • Shapley, Lloyd S.

Abstract

We approach the problem of preference aggregation by endowing both individuals and coalitions with partially-ordered or incomplete preferences for decision under risk. Restricting attention to the case of complete individual preferences, and assuming complete preferences for some pairs of agents (interpersonal comparisons of utility units), we discover that the Extended Pareto Rule (if two disjoint coalitions A and B prefer x to y, then so does the coalition A[union or logical sum]B) imposes a "no arbitrage" condition in the terms of utility comparison between agents. Furthermore, if all the individuals and pairs have complete preferences and certain non-degeneracy conditions are met, then we witness the emergence of a complete preference ordering for coalitions of all sizes. The corresponding utilities are a weighted sum of individual utilities, with the n-1 independent weights obtained from the preferences of n-1 pairs forming a spanning tree in the group.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 62 (2008)
Issue (Month): 2 (March)
Pages: 329-347

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Handle: RePEc:eee:gamebe:v:62:y:2008:i:2:p:329-347

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Web page: http://www.elsevier.com/locate/inca/622836

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References

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  1. Juan Dubra & Fabio Maacheroni & Efe A. Ok, 2001. "Expected Utility Theory without the Completeness Axiom," Cowles Foundation Discussion Papers 1294, Cowles Foundation for Research in Economics, Yale University.
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  8. Baucells, Manel & Shapley, Lloyd S., 2008. "Multiperson utility," Games and Economic Behavior, Elsevier, vol. 62(2), pages 329-347, March.
  9. Sobel, Joel, 2001. "Manipulation of Preferences and Relative Utilitarianism," Games and Economic Behavior, Elsevier, vol. 37(1), pages 196-215, October.
  10. Fishburn, Peter C, 1973. "A Mixture-Set Axiomatization of Conditional Subjective Expected Utility," Econometrica, Econometric Society, vol. 41(1), pages 1-25, January.
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  15. DeMeyer, Frank & Plott, Charles R, 1971. "A Welfare Function Using 'Relative Intensity' of Preference," The Quarterly Journal of Economics, MIT Press, vol. 85(1), pages 179-86, February.
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  17. Sen, Amartya K, 1977. "On Weights and Measures: Informational Constraints in Social Welfare Analysis," Econometrica, Econometric Society, vol. 45(7), pages 1539-72, October.
  18. Amrita Dhillon, 1998. "Extended Pareto rules and relative utilitarianism," Social Choice and Welfare, Springer, vol. 15(4), pages 521-542.
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