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Behavioural utilitarianism and distributive justice

Author

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  • Galanis, Giorgos

    (Goldsmiths, University of London and Centre for Research in Economic Theory and its Applications, University of Warwick.)

  • Veneziani, Roberto

    (School of Economics and Finance, Queen Mary, University of London)

Abstract

What are the distributive implications of utilitarianism? Is it compatible with a concern for equality, as many utilitarians have argued? We analyse these questions in the context of a pure allocation problem. We consider an in nitely-lived economy and, drawing on the behavioural literature, assume that individuals have reference-dependent preferences: agents' utility is a function of current consumption and a reference point which captures consumption habits, or the agents' upbringing. Assuming a history of inequalities in consumption and welfare, we show that the utilitarian allocation is equalising: starting from an unequal distribution, consumption and welfare inequalities decrease over time at the utilitarian optimum. However, even though agents are in a relevant sense identical, equality does not obtain at any finite time.

Suggested Citation

  • Galanis, Giorgos & Veneziani, Roberto, 2020. "Behavioural utilitarianism and distributive justice," CRETA Online Discussion Paper Series 67, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:67
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    More about this item

    Keywords

    utilitarianism ; inequality ; reference dependent preferences JEL Codes: D63 ; D9;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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