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Equity Criteria Based on the Dominance Principle and Individual Preferences: Refinements of the Consensus Approach

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  • Sakamoto, Norihito
Abstract
This paper examines the problem of the indexing dilemma in the context of an ordinal interpersonal comparison of individual situations and proposes a new class of equity criteria based on the dominance principle and individual preferences. First, we show that an interpersonal comparison ordering that satisfies the dominance principle and the monotonicity condition must be a consensus ranking, which requires that individual i's situation with consumption bundle x should be better than j's situation with y whenever all individuals strictly prefer x to y. Second, we propose a new class of equity criteria based on the worst evaluation of each person's situation, which is a class of ordering extensions of interpersonal rankings that respect the consensus condition. In addition, we show its representation theorem and characterize maximin orderings based on our criteria. Third, possibility and impossibility results between the Pareto principle and dominance methods are obtained. Then, we propose a class of median rules as another equity criterion that satisfies the weak Pareto and dominance principles.

Suggested Citation

  • Sakamoto, Norihito, 2018. "Equity Criteria Based on the Dominance Principle and Individual Preferences: Refinements of the Consensus Approach," RCNE Discussion Paper Series 5, Research Center for Normative Economics, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:rcnedp:5
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29612/2018dp5.pdf
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    References listed on IDEAS

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    Cited by:

    1. Sakamoto, Norihito, 2020. "Equity Principles and Interpersonal Comparison of Well-being: Old and New Joint Characterizations of Generalized Leximin, Rank-dependent Utilitarian, and Leximin Rules," RCNE Discussion Paper Series 7, Research Center for Normative Economics, Institute of Economic Research, Hitotsubashi University.
    2. Miyagishima, Kaname, 2019. "Fair criteria for social decisions under uncertainty," Journal of Mathematical Economics, Elsevier, vol. 80(C), pages 77-87.

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    More about this item

    Keywords

    Indexing dilemma; Consensus approach; Ordinal interpersonal comparison; Universal social ordering;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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