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Money metric utilitarianism

Chambers, Christopher P. and Hayashi, Takashi (2008) Money metric utilitarianism. Social Science Working Paper, 1295. California Institute of Technology , Pasadena, CA. https://resolver.caltech.edu/CaltechAUTHORS:20170727-154342486

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Abstract

We discuss a method of ranking allocations in economic environments which applies when we do not know the names or preferences of individual agents. We require that two allocations can be ranked with the knowledge only of their aggregate bundles and community indifference sets–a condition we refer to as aggregate independence. We also postulate a basic Pareto and continuity property, and a property stating that when two disjoint economies and allocations are put together, the ranking in the large economy should be consistent with the rankings in the two smaller economies (reinforcement). We show that a ranking method satisfies these axioms if and only if there is a probability measure over the strictly positive prices for which the rule ranks allocations on the basis of the random-price money-metric utilitarian rule. This is a rule which computes the money-metric utility for each agent at each price, sums these, and then takes an expectation according to the probability measure.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
http://resolver.caltech.edu/CaltechAUTHORS:20171103-140007344Related ItemLater version published in Social Choice and Welfare
Additional Information:We are grateful to David Donaldson, Franois Maniquet, and John Weymark for useful comments. We are especially indebted to Marc Fleurbaey for many detailed comments and suggestions. All errors are our own. Published as Chambers, C. P., & Hayashi, T. (2012). Money-metric utilitarianism. Social Choice and Welfare, 1-23.
Group:Social Science Working Papers
Subject Keywords:money metric, utilitarianism, social choice, GDP, aggregate equivalent income
Series Name:Social Science Working Paper
Issue or Number:1295
Classification Code:JEL: D60, D63
Record Number:CaltechAUTHORS:20170727-154342486
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170727-154342486
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79508
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:02 Aug 2017 20:38
Last Modified:03 Oct 2019 18:20

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