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Accident of Birth, Life Chances adn the Impartial Observer

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  • Grant, Simon

    (Rice U)

  • Kajii, A.

    (Osaka U)

  • Polak, B.

    (Yale U)

Abstract

We confront two common objections to Harsanyi's impartial observer theorem: one to do with 'fairness', and the other to do with different individuals' having different attitudes toward risk. Both these objections can be accommodated if we drop the reduction axiom: in particular, if we distinguish between 'accidents of birth' and real-world 'life chances'. We do not drop the independence axiom that has often been seen as the source of these problems. Just as Harsanyi's theorem yields a utilitarian form of social welfare function, so our approach axiomatizes a generalized utilitarian form. If in addition, welfare is cardinally measurable, then we can interpret the shape of our generalized utilitarian functional from in terms of attitudes toward risk and toward interim inequality.

Suggested Citation

  • Grant, Simon & Kajii, A. & Polak, B., 2002. "Accident of Birth, Life Chances adn the Impartial Observer," Working Papers 2002-08, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:2002-08
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    File URL: http://www.ruf.rice.edu/~econ/papers/2002papers/08Grant.pdf
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    References listed on IDEAS

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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