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Relative Nash welfarism

Yves Sprumont ()

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: Relative Nash welfarism is a solution to the problem of aggregating von Neumann-Morgenstern preferences over a set of lotteries. It ranks such lotteries according to the product of any collection of 0-normalized von Neumann-Morgenstern utilities they generate. We show that this criterion is characterized by the Weak Pareto Principle, Anonymity, and Independence of Harmless Expansions: the social ranking of two lotteries is unaffected by the addition of any alternative that every agent deems at least as good as the one she originally found worst. Relative Nash welfarism is more appealing than relative utilitarianism in contexts where the best relevant alternative for an agent is difficult to identify with confidence.

Keywords: Preference aggregation; lotteries; relative utilitarianism; Nash product (search for similar items in EconPapers)
JEL-codes: D63 D71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
Date: 2017
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