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Fair Utilitarianism

Abstract : Utilitarianism plays a central role in economics, but there is a gap between theory, where it is dominant, and applications, where monetary criteria are often used. For applications, a key di culty for utilitarianism remains to de ne how utilities should be measured and compared across individuals. Drawing on Harsanyi’s approach (Harsanyi, 1955) involving choices in risky situations, we introduce a new normalization of utilities that is the only one ensuring that: 1) a transfer from a rich to a poor is welfare enhancing, and 2) populations with more risk averse people have lower welfare. We embed these requirements in a new characterization of utilitarianism and study some implications of this “fair utilitarianism” for risk sharing, collective risk aversion and the design of health policy.
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https://halshs.archives-ouvertes.fr/halshs-01441070
Contributor : Stéphane Zuber <>
Submitted on : Monday, November 16, 2020 - 5:23:18 PM
Last modification on : Tuesday, January 19, 2021 - 11:09:09 AM

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  • HAL Id : halshs-01441070, version 3

Citation

Marc Fleurbaey, Stéphane Zuber. Fair Utilitarianism. American Economic Journal: Microeconomics, American Economic Association, In press. ⟨halshs-01441070v3⟩

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