On the impossibility of preference aggregation under uncertainty
AbstractWe provide a general theorem on the aggregation of preferences under uncertainty. We study, in the Anscombe-Aumann setting a wide class of preferences that includes most known models of decision under uncertainty (and state-dependent versions of these models). We prove that aggregation is possible and necessarily linear if (society's) preferences are smooth. The latter means that society cannot have a non-neutral attitude towards uncertainty on a subclass of acts. A corollary to our theorem is that it is not possible to aggregate maxmin expected utility maximizers, even when they all have the same set of priors. We show that dropping a weak notion of monotonicity on society's preferences allows one to restore the possibility of aggregation of non-smooth preferences.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v05012.
Length: 31 pages
Date of creation: Feb 2005
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Aggregation; Harsanyi; uncertainty; multiple priors.;
Other versions of this item:
- Thibault Gajdos & Jean-Marc Tallon & Jean-Christophe Vergnaud, 2005. "On the impossibility of preference aggregation under uncertainty," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00193578, HAL.
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- 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-2005-04-16 (All new papers)
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