Measuring Freedom in Games

Hendrik Rommeswinkel

MPRA Paper from University Library of Munich, Germany

Abstract: Behind the veil of ignorance, a policy maker ranks combinations of game forms and information about how players interact within the game forms. The paper presents axioms on the preferences of the policy maker that are necessary and sufficient for the policy maker's preferences to be represented by the sum of an expected valuation and a freedom measure. The freedom measure is the mutual information between players' strategies and the players' outcomes of the game, capturing the degree to which players control their outcomes. The measure extends several measures from the opportunity set based freedom literature to situations where agents interact. This allows freedom to be measured in general economic models and thus derive policy recommendations based on the freedom instead of the welfare of agents. To illustrate the measure and axioms, applications to civil liberties and optimal taxation are provided.

Keywords: Freedom of Choice; Mutual Information; Entropy; Measurement; Game Form; Process; Income Taxation; Civil Liberties (search for similar items in EconPapers)
JEL-codes: D63 D71 D81 (search for similar items in EconPapers)
Date: 2011-06-23, Revised 2021-03-03
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