TY - JOUR
T1 - Fair Utilitarianism
AU - Fleurbaey, Marc
AU - Zuber, Stéphane
N1 - Funding Information:
*Fleurbaey: Paris School of Economics (CNRS), 48 Boulevard Jourdan 75014, Paris, France, and Ecole Normale Supérieure (email: mfleurba@princeton.edu); Zuber: Paris School of Economics (CNRS), Centre d'Econ-omie de la Sorbonne, Maison des Sciences Economiques, 106–112 Boulevard de l'Hopital, 75013, Paris, France (email: Stephane.Zuber@univ-paris1.fr). Michael Ostrovsky was coeditor for this article. This research has been supported by the Chair on Welfare Economics and Social Justice at the Institute for Global Studies (FMSH–Paris) and the Agence nationale de la recherche through the Fair-ClimPop project (ANR-16-CE03-0001-01), the CHop project (ANR-16-CE03-0001-01), and the Investissements d’Avenir program (ANR-10-LABX-93). We would like to thank Edi Karni, Philippe Mongin, Marcus Pivato, and Shaowei Ke, as well as four referees, for their comments and remarks on this paper.
Publisher Copyright:
© 2021
PY - 2021
Y1 - 2021
N2 - Utilitarianism plays a central role in economics, but there is a gap between theory, where utilitarianism is dominant, and applications, where monetary criteria are often used. For applications, a key difficulty is to define how utilities should be measured and compared. Drawing on Harsanyi’s (1955) approach, we introduce a new normalization of utilities ensuring that: (i) a transfer from a rich population to a poor population is welfare enhancing, and (ii) populations with more risk-averse people have lower welfare. We study some implications of this “fair utilitarianism” for risk sharing, collective risk aversion, and the design of health policy.
AB - Utilitarianism plays a central role in economics, but there is a gap between theory, where utilitarianism is dominant, and applications, where monetary criteria are often used. For applications, a key difficulty is to define how utilities should be measured and compared. Drawing on Harsanyi’s (1955) approach, we introduce a new normalization of utilities ensuring that: (i) a transfer from a rich population to a poor population is welfare enhancing, and (ii) populations with more risk-averse people have lower welfare. We study some implications of this “fair utilitarianism” for risk sharing, collective risk aversion, and the design of health policy.
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U2 - 10.1257/mic.20170234
DO - 10.1257/mic.20170234
M3 - Article
AN - SCOPUS:85097973060
SN - 1945-7669
VL - 13
SP - 370
EP - 401
JO - American Economic Journal: Microeconomics
JF - American Economic Journal: Microeconomics
IS - 2
ER -