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Relative Nash Welfarism

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  • Yves SPRUMONT

Abstract

Relative Nash welfarism is a solution to the problem of aggregating von Neumann-Morgenstern preferences over a set of lotteries. It ranks such lotteries according to the product of any collection of 0-normalized von Neumann-Morgenstern utilities they generate. We show that this criterion is characterized by the Weak Pareto Principle, Anonymity, and Independence of Harmless Expansions: the social ranking of two lotteries is unaffected by the addition of any alternative that every agent deems at least as good as the one she originally found worst. Relative Nash welfarism is more appealing than relative utilitarianism in contexts where the best relevant alternative for an agent is difficult to identify with confidence.

Suggested Citation

  • Yves SPRUMONT, 2017. "Relative Nash Welfarism," Cahiers de recherche 07-2017, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:07-2017
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    References listed on IDEAS

    as
    1. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63(4), pages 309-309.
    2. Uzi Segal, 2000. "Let's Agree That All Dictatorships Are Equally Bad," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 569-589, June.
    3. Tilman Börgers & Yan-Min Choo, 2017. "A counterexample to Dhillon (1998)," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(4), pages 837-843, April.
    4. Amrita Dhillon, 1998. "Extended Pareto rules and relative utilitarianism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(4), pages 521-542.
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    More about this item

    Keywords

    preference aggregation; lotteries; relative utilitarianism; Nash product;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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