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Risky social choice with approximate interpersonal comparisons of well-being

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  • Pivato, Marcus

Abstract

We develop a model of social choice over lotteries, where people's psychological characteristics are mutable, their preferences may be incomplete, and approximate interpersonal comparisons of well-being are possible. Formally, we suppose individual preferences are described by a von~Neumann-Morgenstern (vNM) preference order on a space of lotteries over psychophysical states; the social planner must construct a vNM preference order on lotteries over social states. First we consider a model when the individual vNM preference order is incomplete (so not all interpersonal comparisons are possible). Then we consider a model where the individual vNM preference order is complete, but unknown to the planner, and thus modeled by a random variable. In both cases, we obtain characterizations of a utilitarian social welfare function.

Suggested Citation

  • Pivato, Marcus, 2010. "Risky social choice with approximate interpersonal comparisons of well-being," MPRA Paper 25222, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25222
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    References listed on IDEAS

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    1. repec:ubc:bricol:90-03 is not listed on IDEAS
    2. Sen, Amartya, 1970. "Interpersonal Aggregation and Partial Comparability," Econometrica, Econometric Society, vol. 38(3), pages 393-409, May.
    3. Dubra, Juan & Maccheroni, Fabio & Ok, Efe A., 2004. "Expected utility theory without the completeness axiom," Journal of Economic Theory, Elsevier, vol. 115(1), pages 118-133, March.
    4. John C. Harsanyi, 1953. "Cardinal Utility in Welfare Economics and in the Theory of Risk-taking," Journal of Political Economy, University of Chicago Press, vol. 61, pages 434-434.
    5. Sen, Amartya K, 1972. "Interpersonal Comparison and Partial Comparability: A Correction," Econometrica, Econometric Society, vol. 40(5), pages 959-959, September.
    6. Mongin, Ph., 1991. "Harsanyi's aggregation theorem: multi-profile version and unsettled questions," LIDAM Discussion Papers CORE 1991036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Blackorby, Charles, 1975. "Degrees of Cardinality and Aggregate Partial Orderings," Econometrica, Econometric Society, vol. 43(5-6), pages 845-852, Sept.-Nov.
    8. Pivato, Marcus, 2010. "Approximate interpersonal comparisons of well-being," MPRA Paper 25224, University Library of Munich, Germany.
    9. Baucells, Manel & Shapley, Lloyd S., 2008. "Multiperson utility," Games and Economic Behavior, Elsevier, vol. 62(2), pages 329-347, March.
    10. Özgür Evren, 2008. "On the existence of expected multi-utility representations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(3), pages 575-592, June.
    11. Pivato, Marcus, 2010. "Aggregation of incomplete ordinal preferences with approximate interpersonal comparisons," MPRA Paper 25271, University Library of Munich, Germany.
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    Cited by:

    1. Pivato, Marcus, 2010. "Aggregation of incomplete ordinal preferences with approximate interpersonal comparisons," MPRA Paper 25271, University Library of Munich, Germany.
    2. Marcus Pivato, 2015. "Social choice with approximate interpersonal comparison of welfare gains," Theory and Decision, Springer, vol. 79(2), pages 181-216, September.
    3. Pivato, Marcus, 2010. "Approximate interpersonal comparisons of well-being," MPRA Paper 25224, University Library of Munich, Germany.

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    More about this item

    Keywords

    interpersonal comparisons; social welfare; social choice; utility; utilitarian; von Neumann-Morgenstern; risk;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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