Interpersonal Comparisons of Utility: An Algebraic Characterization of Projective Preorders and Some Welfare Consequences
AbstractIt is shown that any completely preordered topological real algebra admits a continuous utility representation which is an algebra-homomorphism (i.e., it is linear and multiplicative). As an application of this result, we provide an algebraic characterization of the projective (dictatorial) preorders defined on Rⁿ. We then establish some welfare implications derived from our main result. In particular, the connection with the normative property called independence of the relative utility pace is discussed.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2594.
Length: 12 pages
Date of creation: Jan 2007
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Find related papers by JEL classification:
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
- D60 - Microeconomics - - Welfare Economics - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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