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Do irrelevant commodities matter?

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Author Info
Marc Fleurbaey (CERSES - Centre de recherche sens, ethique, société - CNRS : UMR8137 - Université Paris Descartes - Paris V)
Koichi Tadenuma
Abstract

We study how to evaluate allocations independently of individual preferences over unavailable commodities. We prove impossibility results suggesting that such evaluations encounter serious difficulties. This is related to the well-known problem of performing international comparisons of standard of living across countries with different consumption goods. We show how possibility results can be retrieved with restrictions on the domain of preferences, on the application of the independence axiom or on the set of allocations to be ranked. Such restrictions appear more plausible when the objects of evaluation are allocations of composite commodities, characteristics or human functionings rather than ordinary commodities.

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Paper provided by HAL in its series Post-Print with number hal-00246315_v1.

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Date of creation: 2007
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Publication status: Published, Econometrica, 2007, 75, 1143–1174
Handle: RePEc:hal:journl:hal-00246315_v1

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Related research
Keywords: consumer preferences; social choice; independence of irrelevant alternatives; characteristics; functionings;

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  1. Le Breton, Michel & Weymark, John, 2002. "Arrovian Social Choice Theory on Economic Domains," IDEI Working Papers 143, Institut d'Économie Industrielle (IDEI), Toulouse, revised Sep 2003. [Downloadable!]
    Other versions:
  2. Border, Kim C., 1983. "Social welfare functions for economic environments with and without the pareto principle," Journal of Economic Theory, Elsevier, vol. 29(2), pages 205-216, April. [Downloadable!] (restricted)
  3. Elisha A. Pazner & David Schmeidler, 1975. "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," Discussion Papers 174, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  4. Kenneth J. Arrow, 1950. "A Difficulty in the Concept of Social Welfare," Journal of Political Economy, University of Chicago Press, vol. 58, pages 328. [Downloadable!] (restricted)
  5. Marc Fleurbaey & Kotaro Suzumura & Koichi Tadenuma, 2005. "The informational basis of the theory of fair allocation," Social Choice and Welfare, Springer, vol. 24(2), pages 311-341, 04. [Downloadable!] (restricted)
  6. Mayston, David J., 1982. "The generation of a social welfare function under ordinal preferences," Mathematical Social Sciences, Elsevier, vol. 3(2), pages 109-129, September. [Downloadable!] (restricted)
  7. Marc Fleurbaey, 2005. "The Pazner-Schmeidler social ordering: A defense," Review of Economic Design, Springer, vol. 9(2), pages 145-166, 04. [Downloadable!] (restricted)
  8. Bordes, Georges & Breton, Michel Le, 1989. "Arrovian theorems with private alternatives domains and selfish individuals," Journal of Economic Theory, Elsevier, vol. 47(2), pages 257-281, April. [Downloadable!] (restricted)
  9. Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2005. "Arrovian aggregation in economic environments: how much should we know about indifference surfaces?," Journal of Economic Theory, Elsevier, vol. 124(1), pages 22-44, September. [Downloadable!] (restricted)
  10. M. Fleurbaey & F. Maniquet, 2008. "Fair social orderings," Economic Theory, Springer, vol. 34(1), pages 25-45, January. [Downloadable!] (restricted)
  11. Redekop, James, 1991. "Social welfare functions on restricted economic domains," Journal of Economic Theory, Elsevier, vol. 53(2), pages 396-427, April. [Downloadable!] (restricted)
  12. LeBreton, M., 1994. "Arrovian Social Choice on Economic Domains," G.R.E.Q.A.M. 94a37, Universite Aix-Marseille III.
  13. Donaldson, David & Weymark, John A., 1988. "Social choice in economic environments," Journal of Economic Theory, Elsevier, vol. 46(2), pages 291-308, December. [Downloadable!] (restricted)
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