Aggregating sets of von Neumann–Morgenstern utilities

We analyze the preference aggregation problem without the assumption that individuals and society have fully determined and observable preferences. More precisely, we endow individuals and society with sets of possible von Neumann–Morgenstern utility functions over lotteries. We generalize the class...

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Bibliographic Details
Published in:Journal of economic theory 2013-03, Vol.148 (2), p.663-688
Main Authors: Danan, Eric, Gajdos, Thibault, Tallon, Jean-Marc
Format: Article
Language:English
Subjects:
Agglomeration
Aggregation
Axioms
Decision analysis
Economic theory
Economics
Economics and Finance
Humanities and Social Sciences
Indeterminacy
Lotteries
Mathematical problems
Neutrality
Pareto optimality
Pareto optimum
Studies
Utilitarianism
Utilities
Utility functions
vNM utility
Welfare economics
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Summary:We analyze the preference aggregation problem without the assumption that individuals and society have fully determined and observable preferences. More precisely, we endow individuals and society with sets of possible von Neumann–Morgenstern utility functions over lotteries. We generalize the classical Pareto and Independence of Irrelevant Alternatives axioms and show they imply a generalization of the classical neutrality assumption. We then characterize the class of neutral social welfare functions. This class is considerably broader for indeterminate than for determinate utilities, where it basically reduces to utilitarianism. We finally characterize several classes of neutral social welfare functions for indeterminate utilities, including the utilitarian and “multi-utilitarian” classes.
ISSN:0022-0531
1095-7235
DOI:10.1016/j.jet.2012.12.018