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Generalized Utilitarianism and Harsanyi’s Partial Observer Theorem

Author

Listed:
  • Simon Grant

    (Dept. of Economics, Rice University)

  • Atsushi Kajii

    (Institute of Economic Research, Kyoto University)

  • Ben Polak

    () (Cowles Foundation, Yale University)

  • Zvi Safra

    (Tel Aviv University and College of Management)

Abstract

We provide an axiomatization of generalized utilitarian social welfare functions in the context of Harsanyi's impartial observer theorem. To do this, we reformulate Harsanyi's problem such that lotteries over identity (accidents of birth) and lotteries over outcomes (life chances) are independent. We show how to accommodate (first) Diamond's critique concerning fairness and (second) Pattanaik's critique concerning differing attitudes toward risk. In each case, we show what separates them from Harsanyi by showing what extra axioms return us to Harsanyi. Thus we provide two new axiomatizations of Harsanyi's utilitarianism.

Suggested Citation

  • Simon Grant & Atsushi Kajii & Ben Polak & Zvi Safra, 2006. "Generalized Utilitarianism and Harsanyi’s Partial Observer Theorem," Cowles Foundation Discussion Papers 1578, Cowles Foundation for Research in Economics, Yale University.
  • Handle: RePEc:cwl:cwldpp:1578
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    References listed on IDEAS

    as
    1. Karni, Edi & Safra, Zvi, 2000. "An extension of a theorem of von Neumann and Morgenstern with an application to social choice theory," Journal of Mathematical Economics, Elsevier, vol. 34(3), pages 315-327, November.
    2. 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 765-765.
    3. Grant, Simon & Kajii, Atsushi & Polak, Ben, 1998. "Intrinsic Preference for Information," Journal of Economic Theory, Elsevier, vol. 83(2), pages 233-259, December.
    4. Mongin, Philippe, 2001. "The impartial observer theorem of social ethics," Economics and Philosophy, Cambridge University Press, vol. 17(02), pages 147-179, October.
    5. John C. Harsanyi, 1953. "Cardinal Utility in Welfare Economics and in the Theory of Risk-taking," Journal of Political Economy, University of Chicago Press, vol. 61, pages 434-434.
    6. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309-309.
    7. Edi Karni & Zvi Safra, 2002. "Individual Sense of Justice: A Utility Representation," Econometrica, Econometric Society, vol. 70(1), pages 263-284, January.
    8. Kreps, David M. & Porteus, Evan L., 1979. "Temporal von neumann-morgenstern and induced preferences," Journal of Economic Theory, Elsevier, vol. 20(1), pages 81-109, February.
    9. Myerson, Roger B, 1981. "Utilitarianism, Egalitarianism, and the Timing Effect in Social Choice Problems," Econometrica, Econometric Society, vol. 49(4), pages 883-897, June.
    10. Broome, John, 1984. "Uncertainty and Fairness," Economic Journal, Royal Economic Society, vol. 94(375), pages 624-632, September.
    11. Sen, Amartya K, 1977. "On Weights and Measures: Informational Constraints in Social Welfare Analysis," Econometrica, Econometric Society, vol. 45(7), pages 1539-1572, October.
    12. Hammond, Peter J, 1981. "Ex-ante and Ex-post Welfare Optimality under Uncertainty," Economica, London School of Economics and Political Science, vol. 48(191), pages 235-250, August.
    13. Kevin W. S. Roberts, 1980. "Possibility Theorems with Interpersonally Comparable Welfare Levels," Review of Economic Studies, Oxford University Press, vol. 47(2), pages 409-420.
    14. Edi Karni, 1996. "Social welfare functions and fairness," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(4), pages 487-496.
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    Citations

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    Cited by:

    1. Asheim, Geir B. & Zuber, Stéphane, 2016. "Evaluating intergenerational risks," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 104-117.
    2. Thibault Gajdos & Feriel Kandil, 2008. "The ignorant observer," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(2), pages 193-232, August.
    3. Hammond, Peter J, 2013. "Extending the Original Position : Revisiting the Pattanaik Critique of Vickrey/Harsanyi Utilitarianism," The Warwick Economics Research Paper Series (TWERPS) 1008, University of Warwick, Department of Economics.
    4. Adler, Matthew & Treich, Nicolas, 2014. "Consumption, Risk and Prioritarianism," TSE Working Papers 14-500, Toulouse School of Economics (TSE).
    5. Grant, Simon & Kajii, Atsushi & Polak, Ben & Safra, Zvi, 2012. "Equally-distributed equivalent utility, ex post egalitarianism and utilitarianism," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1545-1571.
    6. Geir B. Asheim & Stéphane Zuber, 2014. "Probability Adjusted Rank-Discounted Utilitarianism," CESifo Working Paper Series 4728, CESifo Group Munich.
    7. Simon Grant & Atsushi Kajii & Ben Polak & Zvi Safra, 2012. "A generalized representation theorem for Harsanyi’s (‘impartial’) observer," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(4), pages 833-846, October.
    8. repec:eee:matsoc:v:87:y:2017:i:c:p:94-102 is not listed on IDEAS
    9. Piacquadio, Paolo G., 2015. "The Ethics of Intergenerational Risk," Memorandum 15/2015, Oslo University, Department of Economics.
    10. O'Callaghan, Patrick, 2016. "Measuring utility without mixing apples and oranges and eliciting beliefs about stock prices," MPRA Paper 69363, University Library of Munich, Germany.
    11. Fudenberg, Drew & Levine, David K., 2012. "Fairness, risk preferences and independence: Impossibility theorems," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 606-612.
    12. Fleurbaey, Marc & Zuber, Stéphane, 2017. "Fair management of social risk," Journal of Economic Theory, Elsevier, vol. 169(C), pages 666-706.
    13. Marc Fleurbaey & Philippe Mongin, 2016. "The Utilitarian Relevance of the Aggregation Theorem," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 289-306, August.
    14. Harstad, Bård & Eskeland, Gunnar S., 2010. "Trading for the future: Signaling in permit markets," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 749-760, October.
    15. Stefan Trautmann, 2010. "Individual fairness in Harsanyi’s utilitarianism: operationalizing all-inclusive utility," Theory and Decision, Springer, vol. 68(4), pages 405-415, April.
    16. Matthew Adler & Nicolas Treich, 2015. "Prioritarianism and Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 279-308, October.
    17. O'Callaghan, Patrick, 2017. "Axioms for Measuring without mixing apples and Oranges," MPRA Paper 81196, University Library of Munich, Germany.
    18. Berens, Stefan & Chochua, Lasha, 2017. "The impartial observer under uncertainty," Center for Mathematical Economics Working Papers 576, Center for Mathematical Economics, Bielefeld University.
    19. Asheim, Geir B. & Zuber, Stéphane, 2015. "Evaluating Intergenerational Risks: Probabillity Adjusted Rank-Discounted Utilitarianism," Memorandum 06/2015, Oslo University, Department of Economics.

    More about this item

    Keywords

    Generalized utilitarianism; Impartial observer; Social welfare function; Fairness; Ex ante egalitarianism;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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