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Interpersonal Comparisons of Utility: An Algebraic Characterization of Projective Preorders and Some Welfare Consequences

Author

Listed:
  • Candeal, Juan Carlos

    () (University of Zaragoza)

  • Induráin, Esteban

    () (Universidad Pública de Navarra)

  • Molina, José Alberto

    () (University of Zaragoza)

Abstract

It is shown that any completely preordered topological real algebra admits a continuous utility representation which is an algebra-homomorphism (i.e., it is linear and multiplicative). As an application of this result, we provide an algebraic characterization of the projective (dictatorial) preorders defined on Rⁿ. We then establish some welfare implications derived from our main result. In particular, the connection with the normative property called independence of the relative utility pace is discussed.

Suggested Citation

  • Candeal, Juan Carlos & Induráin, Esteban & Molina, José Alberto, 2007. "Interpersonal Comparisons of Utility: An Algebraic Characterization of Projective Preorders and Some Welfare Consequences," IZA Discussion Papers 2594, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2594
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    References listed on IDEAS

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    1. Trockel, Walter, 1992. "An Alternative Proof for the Linear Utility Representation Theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 298-302.
    2. Claude D'Aspremont & Louis Gevers, 1977. "Equity and the Informational Basis of Collective Choice," Review of Economic Studies, Oxford University Press, vol. 44(2), pages 199-209.
    3. Candeal-Haro, Juan Carlos & Indurain-Eraso, Esteban, 1995. "A Note on Linear Utility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(3), pages 519-522, November.
    4. Candeal, J. C. & Indurain, E., 1995. "Homothetic and weakly homothetic preferences," Journal of Mathematical Economics, Elsevier, vol. 24(2), pages 147-158.
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    More about this item

    Keywords

    projective preorders; algebraic utility;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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