Welfare criteria from choice: the sequential solution

Sean Horan and Yves Sprumont ()

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: We study the problem of deriving a complete welfare ordering from a choice function. Under the sequential solution, the best alternative is the alternative chosen from the universal set; the second best is the one chosen when the best alternative is removed; and so on. We show that this is the only completion of Bernheim and Rangel's (2009) welfare relation that satisfies two natural axioms: neutrality, which ensures that the names of the alternatives are welfare-irrelevant; and persistence, which stipulates that every choice function between two welfare-identical choice functions must exhibit the same welfare ordering.

Keywords: Choice-based welfare analysis; bounded rationality (search for similar items in EconPapers)
JEL-codes: D01 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2015
New Economics Papers: this item is included in nep-pbe
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http://hdl.handle.net/1866/11346 (application/pdf)

Related works:
Working Paper: Welfare Criteria from Choice: The Sequential Solution (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2015-01

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