Abstract
John Harsanyi’s (1955) classic article on social choice when individual and social preferences satisfy the expected utility hypothesis is one of the most widely read and discussed contributions to social choice theory. This article introduced Harsanyi’s Social Aggregation Theorem. In this theorem, individual and social preferences are defined on the set of lotteries generated from a finite set of basic prospects. These preferences are assumed to satisfy the expected utility hypothesis and are represented by von Neumann — Morgen- stern (1947) utility functions. The only link between the individual and social preferences is the requirement that society should be indifferent between a pair of lotteries when all individuals are indifferent between them. This condition is known as Pareto Indifference. With these assumptions, Harsanyi concluded that the social utility function must be an affine combination of the individual utility functions; i.e., social utility is a weighted sum of individual utilities once the origin of the social utility function is suitably normalized. This affine relationship between the individual and social utility functions is Harsanyi’s Aggregation Equation.
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Weymark, J.A. (1994). Harsanyi’s Social Aggregation Theorem with Alternative Pareto Principles. In: Eichhorn, W. (eds) Models and Measurement of Welfare and Inequality. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-79037-9_45
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DOI: https://doi.org/10.1007/978-3-642-79037-9_45
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