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Inferring Welfare from Observed Choices: An Axiomatic Approach

Author

Listed:
  • Guilhem Lecouteux

    (Université Côte d’Azur, CNRS, GREDEG UMR 7321, 250 rue Albert Einstein, 06560 Valbonne, France)

  • Ivan Mitrouchev

    (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France)

Abstract

Welfare economics lacks a consensus on how to infer welfare from inconsistent choices. We argue that the di?erent approaches proposed in the literature rely on a set of values endorsed by welfare economists, de?ned as axioms about the structure of normative preferences and their relation to individual choices. We identify four main axioms: (i) normative individualism, (ii) choice context-independence, (iii) normative context-independence, and (iv) consumer sovereignty, which are satis?ed in standard welfare economics. These axioms however become potentially incompatible when preferences are context-dependent. We show that focusing on the principles which guide welfare economists to elicit welfare from inconsistent choices open promising perspectives of research at the intersection of behavioural welfare economics and social choice theory.

Suggested Citation

  • Guilhem Lecouteux & Ivan Mitrouchev, 2023. "Inferring Welfare from Observed Choices: An Axiomatic Approach," Working Papers 2023-iRisk-03, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e202306
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    More about this item

    Keywords

    welfare – choice – preference – context – values – social choice theory;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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