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Multiperson Utility

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  • 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.
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Suggested Citation

  • Lloyd S. Shapley & Manel Baucells, 1998. "Multiperson Utility," UCLA Economics Working Papers 779, UCLA Department of Economics.
    • Handle: RePEc:cla:uclawp:779
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    References listed on IDEAS

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