Taste-independence: an escape route from the opportunity paradox

Jun Matsui ()

Theory and Decision, 2025, vol. 98, issue 2, No 6, 299-320

Abstract: Abstract We provide an escape route from the opportunity paradox, which is described as a conflict between the ex ante and ex post perspectives on compensation by restricting the preference domain. Taste-independence is introduced as a property of preferences such that individuals’ maximized utility levels are the same regardless of their tastes for work. Using the optimal income taxation model, we obtain a compatibility theorem when individuals’ utilities are taste-independent and quasilinear in consumption.

Keywords: Opportunity; Compensation; Domain restriction; Utility (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11238-024-10007-x

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