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Aggregating sets of von Neumann–Morgenstern utilities

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  • Danan, Eric
  • Gajdos, Thibault
  • Tallon, Jean-Marc

Abstract

We analyze the preference aggregation problem without the assumption that individuals and society have fully determined and observable preferences. More precisely, we endow individuals and society with sets of possible von Neumann–Morgenstern utility functions over lotteries. We generalize the classical Pareto and Independence of Irrelevant Alternatives axioms and show they imply a generalization of the classical neutrality assumption. We then characterize the class of neutral social welfare functions. This class is considerably broader for indeterminate than for determinate utilities, where it basically reduces to utilitarianism. We finally characterize several classes of neutral social welfare functions for indeterminate utilities, including the utilitarian and “multi-utilitarian” classes.

Suggested Citation

  • Danan, Eric & Gajdos, Thibault & Tallon, Jean-Marc, 2013. "Aggregating sets of von Neumann–Morgenstern utilities," Journal of Economic Theory, Elsevier, vol. 148(2), pages 663-688.
  • Handle: RePEc:eee:jetheo:v:148:y:2013:i:2:p:663-688 DOI: 10.1016/j.jet.2012.12.018
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    References listed on IDEAS

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    1. Philippe Mongin, 2001. "A note on mixture sets in decision theory," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 24(1), pages 59-69, May.
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    7. Blau, Julian H, 1971. "Arrow's Theorem with Weak Independence," Economica, London School of Economics and Political Science, vol. 38(152), pages 413-420, November.
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    Cited by:

    1. Hill , Brian & Danan , Eric, 2014. "Aggregating Tastes, Beliefs, and Attitudes Under Uncertainty," Les Cahiers de Recherche 1057, HEC Paris.
    2. Eric Danan & Thibault Gajdos & Jean-Marc Tallon, 2015. "Harsanyi's Aggregation Theorem with Incomplete Preferences," American Economic Journal: Microeconomics, American Economic Association, pages 61-69.

    More about this item

    Keywords

    Aggregation; vNM utility; Indeterminacy; Neutrality; Utilitarianism;

    JEL classification:

    • 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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