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An efficiency theorem for incompletely known preferences

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  • Carroll, Gabriel

Abstract

There are n agents who have von Neumann-Morgenstern utility functions on a finite set of alternatives A. Each agent i's utility function is known to lie in the nonempty, convex, relatively open set Ui. Suppose L is a lottery on A that is undominated, meaning that there is no other lottery that is guaranteed to Pareto dominate L no matter what the true utility functions are. Then, there exist utility functions ui[set membership, variant]Ui for which L is Pareto efficient. This result includes the ordinal efficiency welfare theorem as a special case.

Suggested Citation

  • Carroll, Gabriel, 2010. "An efficiency theorem for incompletely known preferences," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2463-2470, November.
    • Handle: RePEc:eee:jetheo:v:145:y:2010:i:6:p:2463-2470
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    References listed on IDEAS

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    Cited by:

    1. De Magistris, Enrico, 2024. "Incomplete preferences or incomplete information? On Rationalizability in games with private values," Games and Economic Behavior, Elsevier, vol. 144(C), pages 126-140.
    2. Haris Aziz, 2017. "Characterizing SW-Efficiency in the Social Choice Domain," Economics Bulletin, AccessEcon, vol. 37(1), pages 48-51.
    3. Aziz, Haris & Brandl, Florian & Brandt, Felix, 2015. "Universal Pareto dominance and welfare for plausible utility functions," Journal of Mathematical Economics, Elsevier, vol. 60(C), pages 123-133.
    4. Gorno, Leandro, 2017. "A strict expected multi-utility theorem," Journal of Mathematical Economics, Elsevier, vol. 71(C), pages 92-95.
    5. Athanassoglou, Stergios, 2011. "Efficiency under a combination of ordinal and cardinal information on preferences," Journal of Mathematical Economics, Elsevier, vol. 47(2), pages 180-185, March.
    6. Miralles, Antonio & Pycia, Marek, 2021. "Foundations of pseudomarkets: Walrasian equilibria for discrete resources," Journal of Economic Theory, Elsevier, vol. 196(C).
    7. Evren, Özgür, 2014. "Scalarization methods and expected multi-utility representations," Journal of Economic Theory, Elsevier, vol. 151(C), pages 30-63.
    8. Carlier, G. & Dana, R.-A., 2013. "Pareto optima and equilibria when preferences are incompletely known," Journal of Economic Theory, Elsevier, vol. 148(4), pages 1606-1623.
    9. Harless, Patrick, 2019. "Efficient rules for probabilistic assignment," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 107-116.
    10. Chambers, Christopher P. & Echenique, Federico, 0. "Empirical welfare economics," Theoretical Economics, Econometric Society.
    11. Haris Aziz, 2014. "A characterization of stochastic dominance efficiency," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(2), pages 205-212, October.
    12. G. Carlier & R.-A. Dana & R.-A. Dana, 2014. "Pareto optima and equilibria when preferences are incompletely known," Working Papers 2014-60, Department of Research, Ipag Business School.
    13. repec:ipg:wpaper:2014-060 is not listed on IDEAS

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