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Aggregation of Bayesian preferences: Unanimity vs Monotonicity

Federica Ceron () and Vassili Vergopoulos ()
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Federica Ceron: Centre d'Economie de la Sorbonne - Paris School of Economics, http://centredeconomiesorbonne.univ-paris1.fr
Vassili Vergopoulos: Centre d'Economie de la Sorbonne - Paris School of Economics, http://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This article reconsiders the issue of Bayesian aggregation by pointing at a conflict that may arise between two logically independent dominance criteria, Pareto dominance and statewise dominance, that are commonly imposed on social preferences. We propose a weaker dominance axiom that restricts statewise dominance to Pareto dominant alternatives and Pareto dominance to statewise dominant alternatives. The associated aggregation rule is a convex combination of two components., the first being a weighted sum of the individuals' subjective expected utility (SEU) functional, the second being a social SEU functional, with associated social utility function and social belief. Such representation establishes the existence of a trade off between adherence to the Pareto principle and compliance with statewise dominance. We then investigate what are the consequences of adding to our assumptions either of the two dominance criteria in their full force and obtain that each of them is equivalent to discarding the other, unless there is essentially a common prior probability

Keywords: Pareto dominance; Monotonicity; Preference aggregation; Social choice, Subjective expected utility (search for similar items in EconPapers)
JEL-codes: D71 D81 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-05
New Economics Papers: this item is included in nep-des, nep-mic and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:17028

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