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Social welfare with net utilities

Author

Listed:
  • Jon X. Eguia

    (Michigan State University)

  • Dimitrios Xefteris

    (University of Cyprus)

Abstract

We consider a society facing a binary choice, in an environment in which differences in utility are comparable across individuals. In such an environment, net utility is the difference between the utility that an individual attains from one alternative, and the utility she attains from the other alternative. A social welfare ordering is a preference relation over net utility profiles. We show that a social welfare ordering satisfies a collection of standard normative axioms if and only if it is representable by a collective utility function defined by the sums of a given power of net individual utilities.

Suggested Citation

  • Jon X. Eguia & Dimitrios Xefteris, 2019. "Social welfare with net utilities," Public Choice, Springer, vol. 179(1), pages 41-49, April.
    • Handle: RePEc:kap:pubcho:v:179:y:2019:i:1:d:10.1007_s11127-018-0527-3
    DOI: 10.1007/s11127-018-0527-3
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    References listed on IDEAS

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    4. W. M. Gorman, 1968. "The Structure of Utility Functions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(4), pages 367-390.
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    More about this item

    Keywords

    Cardinal utility; Social welfare; Collective utility function;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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