Aggregate risk and the Pareto principle

• 成果类型: Article
• 署名作者: Al-Najjar, Nabil, I; Pomatto, Luciano
• 署名单位: Northwestern University; California Institute of Technology
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105084
• 发表日期: 2020
• 关键词: Harsanyi's theorem; Aggregate risk; Preference aggregation

摘要

In the evaluation of public policies, a crucial distinction is between plans that involve purely idiosyncratic risk and those that generate correlated, or aggregate, risk. While natural, this distinction is not captured by standard utilitarian aggregators. In this paper we revisit Harsanyi's (1955) celebrated theory of preferences aggregation and develop a parsimonious generalization of utilitarianism. The theory we propose captures sensitivity to aggregate risk in large populations and can be characterized by two simple axioms of preferences aggregation. (c) 2020 Elsevier Inc. All rights reserved.