Bayesian Decision Theory, Rule Utilitarianism, And Arrow’s Impossibility Theorem

John Harsanyi

A chapter in Game Theory, Social Choice and Ethics, 1979, pp 289-317 from Springer

Abstract: Abstract The first part of this paper reexamines the logical foundations of Bayesian decision theory and argues that the Bayesian criterion of expected-utility maximization is the only decision criterion consistent with rationality. On the other hand, the Bayesian criterion, together with the Pareto optimality requirement, inescapably entails a utilitarian theory of morality. The next sections discuss the role both of cardinal utility and of cardinal interpersonal comparisons of utility in ethics. It is shown that the utilitarian welfare function satisfies all of Arrow’s social choice postulates - avoiding the celebrated impossibility theorem by making use of information which is unavailable in Arrow’s original framework. Finally, rule utilitarianism is contrasted with act utilitarianism and judged to be preferable for the purposes of ethical theory.

Keywords: Utility Function; Social Welfare Function; Social Decision; BAYESIAN Decision Theory; Cardinal Utility (search for similar items in EconPapers)
Date: 1979
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-94-009-9532-1_8

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DOI: 10.1007/978-94-009-9532-1_8

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