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The Hard Problem and the Tyranny of the Loser

Author

Listed:
  • Stan Cheung

    (School of Economics and Finance, Queen Mary University of London)

  • Marco Mariotti

    (School of Economics and Finance, Queen Mary University of London)

  • Roberto Veneziani

    (School of Economics and Finance, Queen Mary University of London)

Abstract

A Hard Problem is a collective choice problem in which the only feasiblealternatives apart from the status quo consist of a welfare gain to some people(the Winners) and a welfare loss to the others (the Losers). These problemsare typical in a number of settings, such as climate action, anti-trust regulation,and tax design. We study how to make collective choices when faced with HardProblems. We find that requiring a relatively weak fairness condition, which wecall Expansion Solidarity, necessarily leads to a dictatorship of the Losers, nomatter how small their number. Even one single Loser must be given the powerto veto any departure from the status quo, regardless of the number of Winners,how large the gains, or how small the loss.

Suggested Citation

  • Stan Cheung & Marco Mariotti & Roberto Veneziani, 2024. "The Hard Problem and the Tyranny of the Loser," Working Papers 971, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:971
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    File URL: https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/2024/wp971.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Pareto improvements; hard choices; solidarity; compromises; maximin difference.;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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