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Measuring Freedom in Games

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  • Rommeswinkel, Hendrik

Abstract

Behind the veil of ignorance, a policy maker ranks combinations of game forms and information about how players interact within the game forms. The paper presents axioms on the preferences of the policy maker that are necessary and sufficient for the policy maker's preferences to be represented by the sum of an expected valuation and a freedom measure. The freedom measure is the mutual information between players' strategies and the players' outcomes of the game, capturing the degree to which players control their outcomes. The measure extends several measures from the opportunity set based freedom literature to situations where agents interact. This allows freedom to be measured in general economic models and thus derive policy recommendations based on the freedom instead of the welfare of agents. To illustrate the measure and axioms, applications to civil liberties and optimal taxation are provided.

Suggested Citation

  • Rommeswinkel, Hendrik, 2011. "Measuring Freedom in Games," MPRA Paper 106426, University Library of Munich, Germany, revised 03 Mar 2021.
    • Handle: RePEc:pra:mprapa:106426
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    References listed on IDEAS

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    More about this item

    Keywords

    Freedom of Choice; Mutual Information; Entropy; Measurement; Game Form; Process; Income Taxation; Civil Liberties;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • 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

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