A new puzzle in the social evaluation of risk

Marc Fleurbaey and Stéphane Zuber

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

Abstract: We highlight a new paradox for the social evaluation of risk that bears on the evaluation of individual well-being rather than social welfare, but has serious implications for social evaluation. The paradox consists in a tension between rationality, respect for individual preferences, and a principle of informational parsimony that excludes individual risk attitudes from the assessment of riskless situations. No social evaluation criteria can satisfy these three principles. This impossibility result has implications for the evaluation of social welfare under risk, especially when the preferences of some individuals are not known. It generalizes existing impossibility results, while relying on very weak principles of social rationality and respect for individual preferences. We explore the possibilities opened by weakening one of our three principles and discuss the advantages and drawbacks of these different routes

Keywords: social welfare; risk; social rationality; Pareto; fairness (search for similar items in EconPapers)
JEL-codes: D63 D81 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-11
New Economics Papers: this item is included in nep-hpe
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Downloads: (external link)
http://mse.univ-paris1.fr/pub/mse/CES2020/20028.pdf (application/pdf)
https://halshs.archives-ouvertes.fr/halshs-03048572

Related works:
Journal Article: A new puzzle in the social evaluation of risk (2022)
Working Paper: A new puzzle in the social evaluation of risk (2022)
Working Paper: A new puzzle in the social evaluation of risk (2022)
Working Paper: A new puzzle in the social evaluation of risk (2022)
Working Paper: A new puzzle in the social evaluation of risk (2020)
Working Paper: A new puzzle in the social evaluation of risk (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:20028

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