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Fair Utilitarianism

Author

Listed:
  • Marc Fleurbaey
  • Stéphane Zuber

Abstract

Utilitarianism plays a central role in economics, but there is a gap between theory, where utilitarianism is dominant, and applications, where monetary criteria are often used. For applications, a key difficulty is to define how utilities should be measured and compared. Drawing on Harsanyi's (1955) approach, we introduce a new normalization of utilities ensuring that: (i) a transfer from a rich population to a poor population is welfare enhancing, and (ii) populations with more risk-averse people have lower welfare. We study some implications of this "fair utilitarianism" for risk sharing, collective risk aversion, and the design of health policy.

Suggested Citation

  • Marc Fleurbaey & Stéphane Zuber, 2021. "Fair Utilitarianism," American Economic Journal: Microeconomics, American Economic Association, vol. 13(2), pages 370-401, May.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:2:p:370-401
    DOI: 10.1257/mic.20170234
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    Cited by:

    1. Balter, Anne G. & Schweizer, Nikolaus, 2024. "Robust decisions for heterogeneous agents via certainty equivalents," European Journal of Operational Research, Elsevier, vol. 317(1), pages 171-184.
    2. Georgios Gerasimou, 2020. "Intensity-Efficient Allocations," Papers 2011.04306, arXiv.org, revised Aug 2025.
    3. Decerf, Benoit & Ferrando, Mery & Quinn, Natalie Naïri, 2025. "Global income poverty measurement with preference heterogeneity: Theory and application," Journal of Development Economics, Elsevier, vol. 177(C).
    4. Fleurbaey, Marc & Zuber, Stéphane, 2025. "Universal social welfare orderings and risk," Journal of Economic Theory, Elsevier, vol. 226(C).
    5. Heinzel, Christoph, 2023. "Comparing utility derivative premia under additive and multiplicative risks," Insurance: Mathematics and Economics, Elsevier, vol. 111(C), pages 23-40.

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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