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Multiperson Utility

Author Info

Listed author(s):
  • Lloyd S. Shapley

    (UCLA)

  • Manel Baucells

    (UCLA)

Abstract

We approach the problem of preference aggregation by endowing both individuals and coalitions with partially-ordered or incomplete cardinal preferences. Consistency across preferences for coalitions comes in the form of the Extended Pareto Rule: if two disjoint coalitions A and B prefer x to y, then so does the coalition A*B. The Extended Pareto Rule has important consequences for the social aggregation of individual preferences. Restricting attention to the case of complete individual preferences, and assuming complete preferences for some pairs of agents (interpersonal comparisons of utility units), we discover that the Extended Pareto Rule imposes a "no arbitrage" condition in the terms of utility comparison between agents. Furthermore, if all the individuals and pairs have complete preferences and certain non-degeneracy conditions are met, then we witness the emergence of a complete preference ordering for coalitions of all sizes. The corresponding utilities are a weighted sum of individual utilities, with the n-1 independent weights obtained from the preferences of n-1 pairs forming a spanning tree in the group. Keywords: Preference aggregation, Incomplete preferences, Extended Pareto Rule.

(This abstract was borrowed from another version of this item.)

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File URL: http://www.econ.ucla.edu/workingpapers/wp779.pdf
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Paper provided by UCLA Department of Economics in its series UCLA Economics Working Papers with number 779.

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Date of creation: 01 Jul 1998
Handle: RePEc:cla:uclawp:779
Contact details of provider: Web page: http://www.econ.ucla.edu/

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  16. Amrita Dhillon, 1998. "Extended Pareto rules and relative utilitarianism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(4), pages 521-542.
  17. Baucells, Manel & Shapley, Lloyd S., 2008. "Multiperson utility," Games and Economic Behavior, Elsevier, vol. 62(2), pages 329-347, March.
  18. Luca Rigotti & Chris Shannon, 2005. "Uncertainty and Risk in Financial Markets," Econometrica, Econometric Society, vol. 73(1), pages 203-243, 01.
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