Ramsey famously condemned discounting “future enjoyments” as “ethically indefensible”. Suppes enunciated an equity criterion which, when social choice is utilitarian, implies giving equal weight to all individuals’ utilities. By contrast, Arrow accepted, perhaps reluctantly, what he called Koopmans’ :287–309, 1960) “strong argument” implying that no equitable preference ordering exists for a sufficiently unrestricted domain of infinite utility streams. Here we derive an equitable utilitarian objective for a finite population based on a version of the Vickrey–Harsanyi original position, where there is (...) an equal probability of becoming each person. For a potentially infinite population facing an exogenous stochastic process of extinction, an equitable extinction biased original position requires equal conditional probabilities, given that the individual’s generation survives the extinction process. Such a position is well-defined if and only if survival probabilities decline fast enough for the expected total number of individuals who can ever live to be finite. Then, provided that each individual’s utility is bounded both above and below, maximizing expected “extinction discounted” total utility—as advocated, inter alia, by the Stern Review on climate change—provides a coherent and dynamically consistent equitable objective, even when the population size of each generation can be chosen. (shrink)

Most moral and political theories require us to make interpersonal comparisons of welfare. This poses a challenge to the popular view that welfare consists in the satisfaction of preferences or des...

In their recently published book Nudge (2008) Richard H. Thaler and Cass R. Sunstein (T&S) defend a position labelled as ‘libertarian paternalism’. Their thinking appeals to both the right and the left of the political spectrum, as evidenced by the bedfellows they keep on either side of the Atlantic. In the US, they have advised Barack Obama, while, in the UK, they were welcomed with open arms by the David Cameron's camp (Chakrabortty 2008). I will consider the following questions. What (...) is Nudge? How is it different from social advertisement? Does Nudge induce genuine preference change? Does Nudge build moral character? Is there a moral difference between the use of Nudge as opposed to subliminal images to reach policy objectives? And what are the moral constraints on Nudge? (shrink)

David Hume has been largely read as a philosopher but not as a scientist. In this article I discuss his work exclusively as a case of science; in particular as a case of early modern science. I compare the combined moral psychology of self-interest and sympathy he argues for with the moral psychology of universal self-interest from Bernard Mandeville, presenting the controversy between the two as a case of theory choice under the normative methodology of the vera causa from the (...) eighteenth century, using inductive support, experimentum crucis and simplicity as criteria. On all three criteria I conclude that Mandeville’s theory of universal self-interest wins the controversy. (shrink)

An important objection to preference-satisfaction theories of well-being is that these theories cannot make sense of interpersonal comparisons of well-being. A tradition dating back to Harsanyi () attempts to respond to this objection by appeal to so-called extended preferences: very roughly, preferences over situations whose description includes agents’ preferences. This paper examines the prospects for defending the preference-satisfaction theory via this extended preferences program. We argue that making conceptual sense of extended preferences is less problematic than others have supposed, but (...) that even so extended preferences do not provide a promising way for the preference satisfaction theorist to make interpersonal well-being comparisons. Our main objection takes the form of a trilemma: depending on how the theory based on extended preferences is developed, either the result will be inconsistent with ordinary preference-satisfaction theory, or it will fail to recover sufficiently rich interpersonal well-being comparisons, or it will take on a number of other arguably odd and undesirable commitments. (shrink)

Although choice and preference are distinct categories, it may in some contexts be a useful idealization to treat choices as fully determined by preferences. In order to construct a general model of such preference-based choice, a method to derive choices from preferences is needed that yields reasonable outcomes for all preference relations, even those that are incomplete and contain cycles. A generalized choice function is introduced for this purpose. It is axiomatically characterized and is shown to compare favourably with alternative (...) constructions. (shrink)

Following a long-standing philosophical tradition, impartiality is a distinctive and determining feature of moral judgments, especially in matters of distributive justice. This broad ethical tradition was revived in welfare economics by Vickrey, and above all, Harsanyi, under the form of the so-called Impartial Observer Theorem. The paper offers an analytical reconstruction of this argument and a step-wise philosophical critique of its premisses. It eventually provides a new formal version of the theorem based on subjective probability.

This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

Rawls's difference principle, according to which social and economic inequalities are justified only if they achieve the greatest benefit of the least advantaged, has been often interpreted as a maximin-principle, in order to make it fit into the frame of welfare economics. Under this interpretation, however, the difference principle is subject to such grave objections, that it can hardly serve as a principle of justice. In order to avoid these difficulties, modifications of the difference principle have been proposed by Sen (...) and Rae. But these proposals don't lead to acceptable resolutions either. As an alternative, a new interpretation of Rawls's difference principle is proposed, which brings out the reasonable core of this principle and, at the same time, repairs the shortcomings of its earlier interpretations. (shrink)

Extensive measurement is the standard measurement-theoretic approach for constructing a ratio scale. It involves the comparison of objects that can be concatenated in an additively representable way. This paper studies the implications of extensively measurable welfare for social choice theory. We do this in two frameworks: an Arrovian framework with a fixed population and no interpersonal comparisons, and a generalized framework with variable populations and full interpersonal comparability. In each framework we use extensive measurement to introduce novel domain restrictions, independence (...) conditions, and constraints on social evaluation. We prove a welfarism theorem for these domains and characterize the social welfare functions that satisfy the axioms of extensive measurement at both the individual and social levels. The main results are simple axiomatizations of strong dictatorship in the Arrovian framework and classical utilitarianism in the generalized framework. (shrink)

This PhD thesis focuses on the philosophical foundations of Neuroeconomics, an innovative research program which combines findings and modelling tools from economics, psychology and neuroscience to account for human choice behaviour. The proponents of Neuroeconomics often manifest the ambition to foster radical modifications in the accounts of choice behaviour developed by its parent disciplines. This enquiry provides a philosophically informed appraisal of the potential for success and the relevance of neuroeconomic research for economics. My central claim is that neuroeconomists can (...) help other economists to build more predictive and explanatory models, yet are unlikely to foster revolutionary modifications in the economic theory of choice. The contents are organized as follows. In chapters 1-2, I present neuroeconomists’ investigative tools, distinguish the most influential approaches to neuroeconomic research and reconstruct the case in favour of a neural enrichment of economic theory. In chapters 3-7, I combine insights from neuro-psychology, economic methodology and philosophy of science to develop a systematic critique of Neuroeconomics. In particular, I articulate four lines of argument to demonstrate that economists are provisionally justified in retaining a methodologically distinctive approach to the modelling of decision making. My first argument points to several evidential and epistemological concerns which complicate the interpretation of neural data and cast doubt on the inferences neuroeconomists often make in their studies. My second argument aims to show that the trade-offs between the modelling desiderata that neuroeconomists and other economists respectively value severely constrain the incorporation of neural insights into economic models. My third argument questions neuroeconomists’ attempts to develop a unified theory of choice behaviour by identifying some central issues on which they hold contrasting positions. My fourth argument differentiates various senses of the term ‘revolution’ and illustrates that neuroeconomists are unlikely to provide revolutionary contributions to economic theory in any of these senses. (shrink)

Changing preferencesis a phenomenonoften invoked but rarely properlyaccounted for. Throughout the history of the social sciences, researchers have come against the possibility that their subjects’ preferenceswere affected by the phenomenato be explainedor by otherfactorsnot taken into accountin the explanation.Sporadically, attempts have been made to systematically investigate these in uences, but none of these seems to have had a lasting impact. Today we are still not much further with respect to preference change than we were at the middle of the last (...) century. This anthology hopes to provide a new impulse for research into this important subject. In particular, we have chosen two routes to amplify this impulse. First, we stress the use of modellingtechniquesfamiliar from economicsand decision theory. Instead of constructing complex, all-encompassing theories of preference change, the authors of this volume start with very simple, formal accounts of some possible and hopefully plausible mechanism of preference change. Eventually, these models may nd their way into larger, empirically adequate theories, but at this stage, we think that the most importantwork lies in building structure.Secondly,we stress the importance of interdisciplinary exchange. Only by drawing together experts from different elds can the complex empirical and theoretical issues in the modelling of preference change be adequately investigated. (shrink)

This paper provides a philosophical critique of social choice theory insofar as it deals with the normative evaluation of voting and voting rules. I will argue that the very method of evaluating voting rules in terms of whether they satisfy various conditions is deeply problematic because introducing strategic behaviour leads to a violation of any condition that makes a difference between voting rules. I also argue that it is legitimate to make interpersonal comparisons of utilities in voting theory. Combining a (...) realistic account of voters’ behaviour with a utilitarian evaluation of the outcomes then leads to the judgment that strategic voting is beneficial. If it is, then Arrow's theorem does not have far-reaching consequences for democracy because one of its conditions is not normatively acceptable. (shrink)

This paper builds upon, but substantially revises, John Harsanyi's concept of ‘extended preferences’. An individual ‘history’ is a possible life that some person (a subject) might lead. Harsanyi supposes that a given spectator, formulating her ethical preferences, can rank histories by empathetic projection: putting herself ‘in the shoes’ of various subjects. Harsanyi then suggests that interpersonal comparisons be derived from the utility function representing spectators’ (supposedly common) ranking of history lotteries. Unfortunately, Harsanyi's proposal has various flaws, including some that have (...) hitherto escaped scholarly attention. In particular, it ignores the limits of personal identity. If the subject has welfare-relevant attributes that the spectator cannot acquire without changing who she is, full empathetic identification of the latter with the former becomes impossible. This paper proposes instead to usesympathyas the attitude on a spectator's part that allows us to make sense of her extended preferences. Sympathy – an attitude of care and concern – is a psychological state quite different from empathy. We should also allow for hetereogeneity in spectators’ extended preferences. Interpersonal comparisons emerge from a plurality of sympathetic spectators, not (as per Harsanyi) from a common empathetic ranking. (shrink)

Contemporary discussions of the positive relation between rational choice and moral theory are a special case of a much older tradition that seeks to show that mutual agreement upon certain moral rules works to the mutual advantage, or in the interests, of those who so agree. I make a few remarks about the history of discussions of the connection between morality and self-interest, after which I argue that the modern theory of rational choice can be naturally understood as a continuation (...) of this older tradition. I then go on to argue for a controversial three-fold thesis: (1) that grounding a theory of morality in terms of rational self-interest is the only epistemologically respectable way to proceed with the justification of moral principles; (2) that despite this, most of the contemporary explorations of rational choice foundations for moral principles do not work—that the models of rational choice to which they appeal yield less than the substantial results that they are intended to yield; but (3) that if one rethinks just what it means to be rational, one can find in fact a promising way to connect the two—specifically through the development of a theory of genuinely cooperative activity. (shrink)

This paper discusses justice-constrained libertarian claims that were proposed as a way to circumvent the impossibility of the Paretian liberal. Since most of the results are negative in character, we suggest an alternative route: A requirement on the structure of individual orderings should be combined with the idea that under particular circumstances individual decisiveness should be controlled by higher-order principles.

According to a popular strategy amongst economists and philosophers, in order to solve the problem of interpersonal utility comparisons, we have to look at how ordinary people make such comparisons in everyday life. The most recent attempt to develop this strategy has been put forward by Goldman in his “Simulation and Interpersonal Utility” (Ethics 4:709–726, 1995). Goldman claims, first, that ordinary people make interpersonal comparisons by simulation and, second, that simulation is reliable for making interpersonal comparisons. In this paper, I (...) focus on Goldman’s latter claim. After updating Goldman’s account of how ordinary people make interpersonal comparisons in the light of Goldman’s newest formulation of his simulation theory of mental ascription (Goldman, Simulating Minds. Oxford University Press, Oxford, 2006), I develop and assess Goldman’s arguments in favour of the reliability of simulation for interpersonal comparisons. I argue that, under certain conditions, there may be room for a scientifically acceptable solution to the problem of interpersonal utility comparisons. (shrink)

This paper summarizes and rebuts the three standard objections made by social choice theorists against interpersonal utility. The first objection argues that interpersonal utility is measningless. I show that this objection either focuses on irrelevant kinds of meaning or else uses implausible criteria of meaningfulness. The second objection argues that interpersonal utility has no role to play in social choice theory. I show that on the contrary interpersonal utility is useful in formulating goals for social choice. The third objection argues (...) that interpersonal utility in social choice theory can be replaced by clearer notions. I show that the replacements proposed are unsatisfactory in either interpersonal utility's descriptive or explanatory role. My conclusion is that interpersonal utility has a legitimate place in social choice theory. (shrink)

Many ethical theories, including in particular consequentialist moral the ories, require comparisons of the amount of good possessed or received by different people. In the case of some goods, such as monetary income, wealth, education, or health, such comparisons are relatively unproblematic. Even in the case of such goods there may be serious empirical measurement problems, but there appear to be no difficulties in principle. Thus Cooter and Rappoport maintained that there was no serious difficulty of making interpersonal utility comparisons (...) for an earlier generation of economists who regarded utility as an index of “material welfare.”. (shrink)

Ramsey famously pronounced that discounting “future enjoyments” would be ethically indefensible. Suppes enunciated an equity criterion implying that all individuals’ welfare should be treated equally. By contrast, Arrow accepted, perhaps rather reluctantly, the logical force of Koopmans’ argument that no satisfactory preference ordering on a sufficiently unrestricted domain of infinite utility streams satisfies equal treatment. In this paper, we first derive an equitable utilitarian objective based on a version of the Vickrey–Harsanyi original position, extended to allow a variable and uncertain (...) population with no finite bound. Following the work of Chichilnisky and others on sustainability, slightly weakening the conditions of Koopmans and co-authors allows intergenerational equity to be satisfied. In fact, assuming that the expected total number of individuals who ever live is finite, and that each individual’s utility is bounded both above and below, there is a coherent equitable objective based on expected total utility. Moreover, it implies the “extinction discounting rule” advocated by, inter alia, the Stern Review on climate change. (shrink)

Suppose it is possible to make approximate interpersonal comparisons of welfare gains and losses. Thus, if w\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$w$$\end{document}, x\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$x$$\end{document}, y\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$y$$\end{document} and z\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$z$$\end{document} are personal states, then it is sometimes possible to say “The welfare gain of the state change w⇝x\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} (...) \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$w\leadsto x$$\end{document} is greater than the welfare gain of the state change y⇝z\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$y\leadsto z$$\end{document}”. We can represent this by the formula “⪰\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$\succeq $$\end{document}”, where \documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$$$\end{document} is a difference preorder: an incomplete preorder on the space of all possible personal state changes. A social state change is a bundle of personal state changes. A social difference preorder is an incomplete preorder on the space of social state changes, which satisfies Pareto and Anonymity axioms. We characterize a family of SDPs which are roughly utilitarian in nature. We also apply the model to redistributive taxation. (shrink)