Utilitarian Aggregation with Heterogeneous Beliefs

The utilitarian aggregation rule requires social utility and beliefs to be a convex combination of individual utilities and beliefs, respectively. Since, in the case of belief heterogeneity, the standard Pareto condition is incompatible with such a separate aggregation, a new condition, called the b...

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Veröffentlicht in:American economic journal. Microeconomics 2021-08, Vol.13 (3), p.112-123
Hauptverfasser: Billot, Antoine, Qu, Xiangyu
Format: Artikel
Sprache:eng
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Zusammenfassung:The utilitarian aggregation rule requires social utility and beliefs to be a convex combination of individual utilities and beliefs, respectively. Since, in the case of belief heterogeneity, the standard Pareto condition is incompatible with such a separate aggregation, a new condition, called the belief-proof Pareto condition, is proposed to alleviate occurrences of spurious agreement by restricting unanimity to beliefs that can be considered reasonable by society. Then, we show, in the Anscombe-Aumann and the Savage framework, that the belief-proof Pareto condition is equivalent to separate aggregation of individual beliefs and tastes.
ISSN:1945-7669
1945-7685
1945-7685
DOI:10.1257/mic.20180344