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Generalized Utilitarianism and Harsanyi’s Partial Observer Theorem

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  • Simon Grant

    (Dept. of Economics, Rice University)

  • Atsushi Kajii

    (Institute of Economic Research, Kyoto University)

  • Ben Polak

    ()
    (Cowles Foundation, Yale University)

  • Zvi Safra

    (Tel Aviv University and College of Management)

Abstract

We provide an axiomatization of generalized utilitarian social welfare functions in the context of Harsanyi's impartial observer theorem. To do this, we reformulate Harsanyi's problem such that lotteries over identity (accidents of birth) and lotteries over outcomes (life chances) are independent. We show how to accommodate (first) Diamond's critique concerning fairness and (second) Pattanaik's critique concerning differing attitudes toward risk. In each case, we show what separates them from Harsanyi by showing what extra axioms return us to Harsanyi. Thus we provide two new axiomatizations of Harsanyi's utilitarianism.

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Bibliographic Info

Paper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1578.

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Length: 59 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:cwl:cwldpp:1578

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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA

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Keywords: Generalized utilitarianism; Impartial observer; Social welfare function; Fairness; Ex ante egalitarianism;

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References

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  1. Philippe Mongin, 2005. "The Impartial Observer Theorem of Social Ethics," Public Economics 0510002, EconWPA.
  2. Edi Karni & Zvi Safra, 2002. "Individual Sense of Justice: A Utility Representation," Econometrica, Econometric Society, vol. 70(1), pages 263-284, January.
  3. Peter A. Diamond, 1967. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparison of Utility: Comment," Journal of Political Economy, University of Chicago Press, vol. 75, pages 765.
  4. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309.
  5. Myerson, Roger B, 1981. "Utilitarianism, Egalitarianism, and the Timing Effect in Social Choice Problems," Econometrica, Econometric Society, vol. 49(4), pages 883-97, June.
  6. Edi Karni, 1996. "Social welfare functions and fairness," Social Choice and Welfare, Springer, vol. 13(4), pages 487-496.
  7. Karni, Edi & Safra, Zvi, 2000. "An extension of a theorem of von Neumann and Morgenstern with an application to social choice theory," Journal of Mathematical Economics, Elsevier, vol. 34(3), pages 315-327, November.
  8. John C. Harsanyi, 1953. "Cardinal Utility in Welfare Economics and in the Theory of Risk-taking," Journal of Political Economy, University of Chicago Press, vol. 61, pages 434.
  9. Hammond, Peter J, 1981. "Ex-ante and Ex-post Welfare Optimality under Uncertainty," Economica, London School of Economics and Political Science, vol. 48(191), pages 235-50, August.
  10. Roberts, Kevin W S, 1980. "Possibility Theorems with Interpersonally Comparable Welfare Levels," Review of Economic Studies, Wiley Blackwell, vol. 47(2), pages 409-20, January.
  11. Kreps, David M. & Porteus, Evan L., 1979. "Temporal von neumann-morgenstern and induced preferences," Journal of Economic Theory, Elsevier, vol. 20(1), pages 81-109, February.
  12. Sen, Amartya K, 1977. "On Weights and Measures: Informational Constraints in Social Welfare Analysis," Econometrica, Econometric Society, vol. 45(7), pages 1539-72, October.
  13. Grant, S & Kajii, A & Polak, B, 1997. "Intrinsic Preference for Information," Papers 323, Australian National University - Department of Economics.
  14. Broome, John, 1984. "Uncertainty and Fairness," Economic Journal, Royal Economic Society, vol. 94(375), pages 624-32, September.
  15. Moulin,Hervi, 1991. "Axioms of Cooperative Decision Making," Cambridge Books, Cambridge University Press, number 9780521424585.
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Citations

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Cited by:
  1. Bommier, Antoine & Zuber, Stéphane, 2009. "The Pareto Principle of Optimal Inequality," TSE Working Papers 09-132, Toulouse School of Economics (TSE).
  2. Grant, Simon & Kajii, Atsushi & Polak, Ben & Safra, Zvi, 2012. "Equally-distributed equivalent utility, ex post egalitarianism and utilitarianism," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1545-1571.
  3. Marc Fleurbaey & Stéphane Zuber, 2014. "Fair management of social risk," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00973480, HAL.
  4. Geir B. Asheim & Stéphane Zuber, 2014. "Probability Adjusted Rank-Discounted Utilitarianism," CESifo Working Paper Series 4728, CESifo Group Munich.
  5. Thibault Gajdos & Feriel Kandil, 2006. "The Ignorant Observer," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00115722, HAL.
  6. Hammond, Peter J, 2013. "Extending the Original Position : Revisiting the Pattanaik Critique of Vickrey/Harsanyi Utilitarianism," The Warwick Economics Research Paper Series (TWERPS) 1008, University of Warwick, Department of Economics.
  7. repec:hal:journl:halshs-00177374 is not listed on IDEAS
  8. Fudenberg, Drew & Lavine, David K., 2012. "Fairness, Risk Preferences and Independence: Impossibility Theorems," Scholarly Articles 11022184, Harvard University Department of Economics.
  9. Stefan Trautmann, 2010. "Individual fairness in Harsanyi’s utilitarianism: operationalizing all-inclusive utility," Theory and Decision, Springer, vol. 68(4), pages 405-415, April.
  10. Adler, Matthew & Treich, Nicolas, 2014. "Consumption, Risk and Prioritarianism," TSE Working Papers 14-500, Toulouse School of Economics (TSE).
  11. Simon Grant & Atsushi Kajii & Ben Polak & Zvi Safra, 2012. "A generalized representation theorem for Harsanyi’s (‘impartial’) observer," Social Choice and Welfare, Springer, vol. 39(4), pages 833-846, October.

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