An efficiency theorem for incompletely known preferences

Gabriel Carroll

Journal of Economic Theory, 2010, vol. 145, issue 6, 2463-2470

Abstract: There are n agents who have von Neumann-Morgenstern utility functions on a finite set of alternatives A. Each agent i's utility function is known to lie in the nonempty, convex, relatively open set Ui. Suppose L is a lottery on A that is undominated, meaning that there is no other lottery that is guaranteed to Pareto dominate L no matter what the true utility functions are. Then, there exist utility functions ui[set membership, variant]Ui for which L is Pareto efficient. This result includes the ordinal efficiency welfare theorem as a special case.

Keywords: Dominance; Ordinal; efficiency; welfare; theorem; Pareto; efficiency; Unknown; preferences (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:145:y:2010:i:6:p:2463-2470

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