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Individual Sense of Justice and Harsanyi's Impartial Observer

Author

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  • Abhinash Borah

    (Department of Economics, Ashoka University)

Abstract
We revisit, within Harsanyi’s impartial observer setting, the question of foundations underlying procedural fairness concerns in welfare judgments. In our setup—that of allocating an indivisible good using a lottery—such concerns, presumably, matter. We draw from the social preferences literature and relax a typical assumption made while addressing this question, namely, that individuals in society do not care about procedural fairness and such concerns arise exclusively at a societal level, which are captured by non-linear social welfare functions (SWFs). In our model, individual attitudes towards procedural fairness are identified and factored into welfare judgments. Specifically, we provide an axiomatic basis within Harsanyi’s (1955) framework to represent procedural fairness sensitive individual preferences by the representation in Karni and Safra (2002). We then show, in terms of underlying axioms, how such individual assessments incorporating both risk and procedural fairness attitudes can be aggregated by means of utilitarian and generalized utilitarian SWFs.

Suggested Citation

  • Abhinash Borah, 2019. "Individual Sense of Justice and Harsanyi's Impartial Observer," Working Papers 12, Ashoka University, Department of Economics.
  • Handle: RePEc:ash:wpaper:12
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    File URL: https://dp.ashoka.edu.in/ash/wpaper/paper12_0.pdf
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    References listed on IDEAS

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    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    2. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    3. Fudenberg, Drew & Levine, David K., 2012. "Fairness, risk preferences and independence: Impossibility theorems," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 606-612.
    4. J. Michelle Brock & Andreas Lange & Erkut Y. Ozbay, 2013. "Dictating the Risk: Experimental Evidence on Giving in Risky Environments," American Economic Review, American Economic Association, vol. 103(1), pages 415-437, February.
    5. Kota Saito, 2013. "Social Preferences under Risk: Equality of Opportunity versus Equality of Outcome," American Economic Review, American Economic Association, vol. 103(7), pages 3084-3101, December.
    6. Edi Karni & Zvi Safra, 2002. "Individual Sense of Justice: A Utility Representation," Econometrica, Econometric Society, vol. 70(1), pages 263-284, January.
    7. Charness, Gary & Rabin, Matthew, 2002. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    8. Broome, John, 1984. "Uncertainty and Fairness," Economic Journal, Royal Economic Society, vol. 94(375), pages 624-632, September.
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    11. Edi Karni, 1996. "Social welfare functions and fairness," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(4), pages 487-496.
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    13. Karni, Edi & Safra, Zvi, 2000. "An extension of a theorem of von Neumann and Morgenstern with an application to social choice theory," Journal of Mathematical Economics, Elsevier, vol. 34(3), pages 315-327, November.
    14. Epstein, Larry G & Segal, Uzi, 1992. "Quadratic Social Welfare Functions," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 691-712, August.
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    18. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    19. Stefan Trautmann, 2010. "Individual fairness in Harsanyi’s utilitarianism: operationalizing all-inclusive utility," Theory and Decision, Springer, vol. 68(4), pages 405-415, April.
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    Cited by:

    1. Seiji TAKANASHI, 2021. "Ex post fairness and ex ante fairness in social preferences under risk," Discussion papers e-20-006, Graduate School of Economics , Kyoto University.

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    More about this item

    Keywords

    generalized utilitarianism;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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