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Robust normative comparisons of socially risky situations

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  • Nicolas Gravel

    ()

  • Benoît Tarroux

    ()

Abstract

In this paper, we theoretically characterize robust empirically implementable normative criteria for evaluating socially risky situations. Socially risky situations are modeled as distributions, among individuals, of lotteries on a finite set of state-contingent pecuniary consequences. Individuals are assumed to have selfish Von Neumann–Morgenstern preferences for these socially risky situations. We provide empirically implementable criteria that coincide with the unanimity, over a reasonably large class of such individual preferences, of anonymous and Pareto-inclusive Von Neuman Morgenstern social rankings of risks. The implementable criteria can be interpreted as sequential expected poverty dominance. An illustration of the usefulness of the criteria for comparing the exposure to unemployment risk of different segments of the French and US workforce is also provided. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Nicolas Gravel & Benoît Tarroux, 2015. "Robust normative comparisons of socially risky situations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 257-282, February.
  • Handle: RePEc:spr:sochwe:v:44:y:2015:i:2:p:257-282
    DOI: 10.1007/s00355-014-0833-8
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D3 - Microeconomics - - Distribution
    • 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
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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