TY - JOUR
T1 - VALUE PRESERVING WELFARE WEIGHTS FOR SOCIAL OPTIMIZATION PROBLEMS
AU - Anagnostopoulos, Alexis
AU - Carceles-Poveda, Eva
AU - Tauman, Yair
N1 - Publisher Copyright:
© (2021) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
PY - 2021/11
Y1 - 2021/11
N2 - We propose endogenous, value preserving (VP) welfare weights as an alternative to equal weights utilitarianism. VP weights require that the contribution of an agent's endowments to social welfare is proportional to the contribution of the final allocation to his welfare. Under three axioms, the per unit contribution of a good to welfare is shown to equal the gradient of the welfare function. VP weights coincide with Negishi weights in frictionless environments but prescribe redistribution toward a good's owner when the good's social value exceeds its market value. When ability is treated as an endowment, VP weights reward ability and effort.
AB - We propose endogenous, value preserving (VP) welfare weights as an alternative to equal weights utilitarianism. VP weights require that the contribution of an agent's endowments to social welfare is proportional to the contribution of the final allocation to his welfare. Under three axioms, the per unit contribution of a good to welfare is shown to equal the gradient of the welfare function. VP weights coincide with Negishi weights in frictionless environments but prescribe redistribution toward a good's owner when the good's social value exceeds its market value. When ability is treated as an endowment, VP weights reward ability and effort.
UR - http://www.scopus.com/inward/record.url?scp=85109324200&partnerID=8YFLogxK
U2 - 10.1111/iere.12530
DO - 10.1111/iere.12530
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AN - SCOPUS:85109324200
SN - 0020-6598
VL - 62
SP - 1627
EP - 1653
JO - International Economic Review
JF - International Economic Review
IS - 4
ER -