Fair Utilitarianism

Marc Fleurbaey, Stéphane Zuber

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

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. (JEL D63, D81)

Original languageEnglish (US)
Pages (from-to)370-401
Number of pages32
JournalAmerican Economic Journal: Microeconomics
Volume13
Issue number2
DOIs
StatePublished - 2021

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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