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The Non-Existence of Representative Agents

Author

Listed:
  • Matthew O. Jackson

    (Stanford University)

  • Leeat Yariv

    (Princeton University)

Abstract

We characterize environments having a representative agent: an agent whose preferences over aggregate alternatives correspond to a weighted average of the population’s utilities for the disaggregated alternatives. The existence of a representative agent imposes strong restrictions on individual utility functions — requiring them to be linear in the allocation and additively separable in any parameter that characterizes agents’ preferences (e.g.; a risk aversion parameter; a discount factor; etc.).

Suggested Citation

  • Matthew O. Jackson & Leeat Yariv, 2020. "The Non-Existence of Representative Agents," Working Papers 2020-74, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2020-74
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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