Generalized Utilitarianism and Harsanyi's Impartial Observer Theorem

Simon Grant, Atsushi Kajii, Ben Polak, Zvi Safra

Research output: Contribution to journalArticlepeer-review

Abstract

Harsanyi's impartial observer must consider two types of lotteries: imaginary identity lotteries ("accidents of birth") that she faces as herself and the real outcome lotteries ("life chances") to be faced by the individuals she imagines becoming. If we maintain a distinction between identity and outcome lotteries, then Harsanyi-like axioms yield generalized utilitarianism, and allow us to accommodate concerns about different individuals' risk attitudes and concerns about fairness. Requiring an impartial observer to be indifferent as to which individual should face similar risks restricts her social welfare function, but still allows her to accommodate fairness. Requiring an impartial observer to be indifferent between identity and outcome lotteries, however, forces her to ignore both fairness and different risk attitudes, and yields a new axiomatization of Harsanyi's utilitarianism.

Original languageEnglish
Pages (from-to)1939-1971
Number of pages33
JournalEconometrica
Volume78
Issue number6
DOIs
StatePublished - Nov 2010

Keywords

  • Ex ante egalitarianism
  • Fairness
  • Generalized utilitarianism
  • Impartial observer
  • Social welfare function

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