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Unequal uncertainties and uncertain inequalities: an axiomatic approach

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  • Thibault Gajdos

    ()

  • Eric Maurin

    ()

Abstract

In this paper, we provide an axiomatic characterization of social welfare functions for uncertain incomes. Our most general result is that a small number of reasonable assumptions regarding welfare orderings under uncertainty rule out pure ex ante as well as pure ex post evaluations. Any social welfare function that satisfies these axioms should lie strictly between the ex ante and the ex post evaluations of income distributions. We also provide an axiomatic characterization of the weighted average of the minimum and the maximum of ex post and the ex ante evaluations.

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Bibliographic Info

Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers - Applied Mathematics Series with number 15-2003.

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Length: 29 pages
Date of creation: Sep 2002
Date of revision: Mar 2003
Handle: RePEc:icr:wpmath:15-2003

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Keywords: Inequality; Uncertainty; Multiple Priors;

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