The relevance of utilirianism
Author's abstract. Harsanyi invested his Aggregation Theorem and Impartial Observer Theorem with deep utilitarian sense, but Sen redescribed them as "representation theorems" with little ethical import. This negative view has gained wide acquiescence in economics. Against it, we support the utilitarian interpretation by a novel argument relative to the Aggregation Theorem. We suppose that a utilitarian observer evaluates non-risky alternatives by the sum of individual utilities and investigate his von Neumann-Morgenstern (VNM) preference on risky alternatives. Adding some technical assumptions to Harsanyi’s, we conclude that (i) this observer would use the utility sum as a VNM utility function, and crucially, (ii) any social observer would evaluate both risky and non-risky alternatives in terms of a weighted utility sum. Hence, pace Sen, VNM theory can give some interesting support to utilitarianism. The argument is conveyed by means of three theorems that encapsulate Harsanyi’s original one as a particular step.
|Date of creation:||26 Nov 2011|
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