Risky social choice with approximate interpersonal comparisons of well-being
MPRA Paper from University Library of Munich, Germany
We develop a model of social choice over lotteries, where people's psychological characteristics are mutable, their preferences may be incomplete, and approximate interpersonal comparisons of well-being are possible. Formally, we suppose individual preferences are described by a von~Neumann-Morgenstern (vNM) preference order on a space of lotteries over psychophysical states; the social planner must construct a vNM preference order on lotteries over social states. First we consider a model when the individual vNM preference order is incomplete (so not all interpersonal comparisons are possible). Then we consider a model where the individual vNM preference order is complete, but unknown to the planner, and thus modeled by a random variable. In both cases, we obtain characterizations of a utilitarian social welfare function.
Keywords: interpersonal comparisons; social welfare; social choice; utility; utilitarian; von Neumann-Morgenstern; risk (search for similar items in EconPapers)
JEL-codes: D63 D70 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hap, nep-mic and nep-upt
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