Unequal Uncertainties and Uncertain Inequalities: An Axiomatic Approach

Thibault Gajdos (1, 2) , Eric Maurin (1)

1 CREST - Centre de Recherche en Économie et Statistique
2 EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative

In this paper, we provide an axiomatic characterization of social welfare functions for uncertain incomes. Our most general result is that a small number of reasonable assumptions regarding welfare orderings under uncertainty rule out pure ex ante as well as pure ex post
evaluations. Any social welfare function that satisfies these axioms should lie strictly between the ex ante and the ex post evaluations of income distributions. We also provide an axiomatic characterization of the weighted average of the minimum and the maximum of ex post and the ex ante evaluations.

Mots clés: Inequality; Uncertainty; Multiple Priors

Domaines: Economies et finances

Thibault Gajdos, Eric Maurin. Unequal Uncertainties and Uncertain Inequalities: An Axiomatic Approach. Journal of Economic Theory, 2004, 116 (1), pp.93-118. ⟨10.1016/j.jet.2003.07.008⟩. ⟨halshs-00085940⟩