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Multiperson Utility

  • Lloyd S. Shapley

    (UCLA)

  • Manel Baucells

    (UCLA)

We approach the problem of preference aggregation by endowing both individuals and coalitions with partially-ordered or incomplete preferences for decision under risk. 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 (if two disjoint coalitions A and B prefer x to y, then so does the coalition A[union or logical sum]B) 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.

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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
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Handle: RePEc:cla:uclawp:779
Contact details of provider: Web page: http://www.econ.ucla.edu/

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  1. Costis Skiadas, 1997. "Conditioning and Aggregation of Preferences," Econometrica, Econometric Society, vol. 65(2), pages 347-368, March.
  2. James S. Dyer & Rakesh K. Sarin, 1979. "Group Preference Aggregation Rules Based on Strength of Preference," Management Science, INFORMS, vol. 25(9), pages 822-832, September.
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  4. Truman F. Bewley, 1986. "Knightian Decision Theory: Part 1," Cowles Foundation Discussion Papers 807, Cowles Foundation for Research in Economics, Yale University.
  5. Dubra, Juan & Maccheroni, Fabio & Ok, Efe A., 2004. "Expected utility theory without the completeness axiom," Journal of Economic Theory, Elsevier, vol. 115(1), pages 118-133, March.
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  8. Saposnik, Rubin, 1975. "Social Choice with Continuous Expression of Individual Preferences," Econometrica, Econometric Society, vol. 43(4), pages 683-90, July.
  9. Manel Baucells & Rakesh K. Sarin, 2003. "Group Decisions with Multiple Criteria," Management Science, INFORMS, vol. 49(8), pages 1105-1118, August.
  10. Fishburn, Peter C, 1973. "A Mixture-Set Axiomatization of Conditional Subjective Expected Utility," Econometrica, Econometric Society, vol. 41(1), pages 1-25, January.
  11. Kalai, Ehud & Schmeidler, David, 1977. "Aggregation Procedure for Cardinal Preferences: A Formulation and Proof of Samuelson's Impossibility Conjecture," Econometrica, Econometric Society, vol. 45(6), pages 1431-38, September.
  12. Schmeidler, David, 1969. "Competitive Equilibria in Markets with a Continuum of Traders and Incomplete Preferences," Econometrica, Econometric Society, vol. 37(4), pages 578-85, October.
  13. Manel Baucells & Lloyd S. Shapley, 2000. "Multiperson Utility," Econometric Society World Congress 2000 Contributed Papers 0078, Econometric Society.
  14. 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.
  15. Peter A. Diamond, 1967. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparison of Utility: Comment," Journal of Political Economy, University of Chicago Press, vol. 75, pages 765.
  16. Sen, Amartya, 1970. "Interpersonal Aggregation and Partial Comparability," Econometrica, Econometric Society, vol. 38(3), pages 393-409, May.
  17. Edi Karni, 2003. "Impartiality and interpersonal comparisons of variations in well-being," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 95-111, 08.
  18. Frank DeMeyer & Charles R. Plott, 1971. "A Welfare Function Using "Relative Intensity" of Preference," The Quarterly Journal of Economics, Oxford University Press, vol. 85(1), pages 179-186.
  19. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309.
  20. Luce, R Duncan & Krantz, David H, 1971. "Conditional Expected Utility," Econometrica, Econometric Society, vol. 39(2), pages 253-71, March.
  21. Sen, Amartya K, 1977. "On Weights and Measures: Informational Constraints in Social Welfare Analysis," Econometrica, Econometric Society, vol. 45(7), pages 1539-72, October.
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