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Social preference under twofold uncertainty

Author

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  • Mongin, Philippe
  • Pivato, Marcus
Abstract
We investigate the conflict between the ex ante and ex post criteria of social welfare in a novel axiomatic framework of individual and social decisions, which distinguishes between a subjective and an objective source of uncertainty. This framework permits us to endow the individuals and society not only with ex ante and ex post preferences, as is classically done, but also with interim preferences of two kinds, and correspondingly, to introduce interim forms of the Pareto principle. After characterizing the ex ante and ex post criteria, we present a first solution to their conflict that amounts to extending the former as much possible in the direction of the latter. Then, we present a second solution, which goes in the opposite direction, and is our preferred one. This solution combines the ex post criterion with an objective interim Pareto principle, which avoids the pitfalls of the ex ante Pareto principle, and especially the problem of "spurious unanimity" discussed in the literature. Both solutions translate the assumed Pareto conditions into weighted additive utility representations, and both attribute common individual probability values only to the objective source of uncertainty.

Suggested Citation

  • Mongin, Philippe & Pivato, Marcus, 2016. "Social preference under twofold uncertainty," MPRA Paper 71776, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71776
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Dietrich, Franz, 2021. "Fully Bayesian aggregation," Journal of Economic Theory, Elsevier, vol. 194(C).
    2. Philippe Mongin & Marcus Pivato, 2021. "Rawls’s difference principle and maximin rule of allocation: a new analysis," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1499-1525, June.
    3. Xiangyu Qu, 2020. "Belief-consistent Pareto dominance," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 219-229, October.
    4. Fleurbaey, Marc & Zuber, Stéphane, 2017. "Fair management of social risk," Journal of Economic Theory, Elsevier, vol. 169(C), pages 666-706.
    5. Sprumont, Yves, 2018. "Belief-weighted Nash aggregation of Savage preferences," Journal of Economic Theory, Elsevier, vol. 178(C), pages 222-245.
    6. Jean Baccelli & Marcus Pivato, 2021. "Philippe Mongin (1950–2020)," Theory and Decision, Springer, vol. 90(1), pages 1-9, February.
    7. Bach Dong-Xuan, 2024. "Aggregation of misspecified experts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(3), pages 923-943, November.
    8. Michel Grabisch & Benjamin Monet & Vassili Vergopoulos, 2023. "Subjective expected utility through stochastic independence," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(3), pages 723-757, October.
    9. Kaname Miyagishima, 2022. "Efficiency, equity, and social rationality under uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(1), pages 237-255, February.
    10. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2016. "Utilitarianism with and without expected utility," MPRA Paper 72578, University Library of Munich, Germany.
    11. Pivato, Marcus, 2022. "Bayesian social aggregation with accumulating evidence," Journal of Economic Theory, Elsevier, vol. 200(C).
    12. Marc Fleurbaey, 2020. "Philippe Mongin 1950–2020," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 399-403, October.

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    More about this item

    Keywords

    Ex ante social welfare; ex post social welfare; objective versus subjective uncertainty; Pareto principle; separability; Harsanyi social aggregation theorem; spurious unanimity.;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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