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Multiperson Utility

Author

Listed:
  • Manel Baucells

    (Universidad de Navarra)

  • Lloyd S. Shapley

    (University of California)

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.

Suggested Citation

  • Manel Baucells & Lloyd S. Shapley, 2000. "Multiperson Utility," Econometric Society World Congress 2000 Contributed Papers 0078, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0078
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    References listed on IDEAS

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