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Bayesian social aggregation with accumulating evidence

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  • Marcus Pivato

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

How should we aggregate the ex ante preferences of Bayesian agents with heterogeneous beliefs? Suppose the state of the world is described by a random process that unfolds over time. Different agents have different beliefs about the probabilistic laws governing this process. As new information is revealed over time by the process, agents update their beliefs and preferences via Bayes rule. Consider a Pareto principle that applies only to preferences which remain stable in the long run under these updates. I show that this "eventual Pareto" principle implies that the social planner must be a utilitarian. But it does not impose any relationship between the beliefs of the individuals and those of the planner, except for a weak compatibility condition

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  • Marcus Pivato, 2022. "Bayesian social aggregation with accumulating evidence," Post-Print hal-03637877, HAL.
    • Handle: RePEc:hal:journl:hal-03637877
    DOI: 10.1016/j.jet.2021.105399
    Note: View the original document on HAL open archive server: https://hal.science/hal-03637877
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    More about this item

    Keywords

    Subjective expected utility; Utilitarian; Ex ante Pareto; Stochastic process;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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