Welfare vs. Utility

Abstract

Ever since the Harsanyi-Sen debate, it is controversial whether someone's welfare should be measured by her von-Neumann-Morgenstern (VNM) utility, for instance when analysing welfare intensity, social welfare, interpersonal welfare comparisons, or welfare inequality. We prove that natural working hypotheses lead to a different welfare measure. It addresses familiar concerns about VNM utility, by faithfully capturing non-ordinal welfare features such as welfare intensity, despite resting on purely ordinal evidence such as revealed preferences or self-reported welfare comparisons. Using this welfare measure instead of VNM utility alters social welfare analysis -- for instance, Harsanyi's `utilitarian theorem' now effectively supports prioritarianism. VNM utility is shown to be a hybrid object, determined by an interplay of two factors: welfare and attitude to intrinsic risk, i.e., to risk in welfare rather than outcomes.

Author's Profile

Franz Dietrich
Centre National de la Recherche Scientifique

Analytics

Added to PP
2025-02-02

Downloads
59 (#101,095)

6 months
59 (#88,675)

Historical graph of downloads since first upload
This graph includes both downloads from PhilArchive and clicks on external links on PhilPapers.
How can I increase my downloads?