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Interpersonal Comparisons of Utility: An Algebraic Characterization of Projective Preorders and Some Welfare Consequences

Author

Listed:
  • Candeal, Juan Carlos

    (University of Zaragoza)

  • Induráin, Esteban

    (Universidad Pública de Navarra)

  • Molina, José Alberto

    (University of Zaragoza)

Abstract

It is shown that any completely preordered topological real algebra admits a continuous utility representation which is an algebra-homomorphism (i.e., it is linear and multiplicative). As an application of this result, we provide an algebraic characterization of the projective (dictatorial) preorders defined on R?. We then establish some welfare implications derived from our main result. In particular, the connection with the normative property called independence of the relative utility pace is discussed.

Suggested Citation

  • Candeal, Juan Carlos & Induráin, Esteban & Molina, José Alberto, 2007. "Interpersonal Comparisons of Utility: An Algebraic Characterization of Projective Preorders and Some Welfare Consequences," IZA Discussion Papers 2594, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2594
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    References listed on IDEAS

    as
    1. Marc Fleurbaey & Peter Hammond, 2004. "Interpersonally comparable utility," Post-Print hal-00247066, HAL.
    2. Claude D'Aspremont & Louis Gevers, 1977. "Equity and the Informational Basis of Collective Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(2), pages 199-209.
    3. Trockel, Walter, 1992. "An Alternative Proof for the Linear Utility Representation Theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(2), pages 298-302, April.
    4. Candeal, J. C. & Indurain, E., 1995. "Homothetic and weakly homothetic preferences," Journal of Mathematical Economics, Elsevier, vol. 24(2), pages 147-158.
    5. Candeal-Haro, Juan Carlos & Indurain-Eraso, Esteban, 1995. "A Note on Linear Utility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(3), pages 519-522, November.
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    More about this item

    Keywords

    projective preorders; algebraic utility;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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