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Unequal Uncertainties and Uncertain Inequalities : An Axiomatic Approach

  • Thibault Gadjos

    (Crest)

  • Eric Maurin

    (Crest)

In this paper, we provide an axiomatic characterization of social welfare functions for uncertain incomes. Our most general result is that a small number of reasonable assumptions regarding welfare orderings under uncertainty rule out pure ex ante as well as pure ex post evaluations. Any social welfare function that satisfies these axioms should lie strictly between the ex ante and the ex post evaluations of income distributions. We also provide an axiomatic characterization of the weighted average of the minimum and the maximum of ex post and the ex ante evaluations.

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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2002-32.

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Date of creation: 2002
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Handle: RePEc:crs:wpaper:2002-32
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