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Assessing Risky Social Situations

  • Marc Fleurbaey

    ()

    (CNRS-CERSES, University Paris 5, and IDEP)

This paper analyzes social situations in the context of risk. A new argument is proposed in order to defend the ex-post approach against Diamond’s (1967) famous critique of Harsanyi’s (1955) utilitarian theorem. It leads to a characterization of the criterion consisting in computing the expected value of the “equal-equivalent”. Characterizations of the ex-post maximin and leximin criteria, as well as a variant of Harsanyi’s theorem, are also obtained. It is examined how to take account of concerns for ex-ante fairness within this ex-post approach. Related issues are also addressed, such as the rescue problem or preference for catastrophe avoidance.

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Paper provided by Institut d'economie publique (IDEP), Marseille, France in its series IDEP Working Papers with number 0703.

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Length: 40 pages
Date of creation: Jan 2007
Date of revision: Jan 2007
Handle: RePEc:iep:wpidep:0703
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  1. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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  12. Fleurbaey, Marc, 2009. "Two variants of Harsanyi's aggregation theorem," Economics Letters, Elsevier, vol. 105(3), pages 300-302, December.
  13. Alon Harel & Zvi Safra & Uzi Segal, 2003. "Ex-Post Egalitarianism," Boston College Working Papers in Economics 563, Boston College Department of Economics.
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  22. Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-68, December.
  23. Hammond, P.J. & , ., 1987. "Consequentialist foundations for expected utility," CORE Discussion Papers 1987016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  30. Wakker, Peter, 1993. "Savage's Axioms Usually Imply Violation of Strict Stochastic Dominance," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 487-93, April.
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  32. Kolm, Serge-Christophe, 1998. "Chance and justice: Social policies and the Harsanyi-Vickrey-Rawls problem," European Economic Review, Elsevier, vol. 42(8), pages 1393-1416, September.
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  39. John Roemer, 2006. "The Global Welfare Economics of Immigration," Social Choice and Welfare, Springer, vol. 27(2), pages 311-325, October.
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