Aggregating sets of von Neumann-Morgenstern utilities
AbstractWe analyze the aggregation problem without the assumption that individuals and society have fully determined and observable preferences. More precisely, we endow individuals ans society with sets of possible von Neumann-Morgenstern utility functions over lotteries. We generalize the classical neutrality assumption to this setting and characterize the class of neutral social welfare function. This class turns out to be considerably broader for indeterminate than for determinate utilities, where it basically reduces to utilitarianism. In particular, aggregation rules may differ by the relationship between individual and social indeterminacy. We characterize several subclasses of neutral aggregation rules and show that utilitarian rules are those that yield the least indeterminate social utilities, although they still fail to systematically yield a determinate social utility.
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Date of creation: Jul 2010
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Aggregation; vNM utility; indeterminacy; neutrality; utilitarianism;
Other versions of this item:
- Danan, Eric & Gajdos, Thibault & Tallon, Jean-Marc, 2013. "Aggregating sets of von Neumann–Morgenstern utilities," Journal of Economic Theory, Elsevier, vol. 148(2), pages 663-688.
- Eric Danan & Thibault Gajdos & Jean-Marc Tallon, 2013. "Aggregating sets of von Neumann-Morgenstern utilities," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00788647, HAL.
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-CDM-2010-10-16 (Collective Decision-Making)
- NEP-GTH-2010-10-16 (Game Theory)
- NEP-UPT-2010-10-16 (Utility Models & Prospect Theory)
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