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A new puzzle in the social evaluation of risk

Published online by Cambridge University Press:  02 February 2022

Marc Fleurbaey Open the ORCID record for Marc Fleurbaey [Opens in a new window]  and
Stéphane Zuber Open the ORCID record for Stéphane Zuber [Opens in a new window]
Marc Fleurbaey
Affiliation:
Paris School of Economics and CNRS, Paris, France
Stéphane Zuber
Affiliation:
Paris School of Economics and CNRS, Paris, France University Paris 1, Paris, France
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Abstract

We highlight a new paradox for the social evaluation of risk that bears on the evaluation of individual well-being rather than social welfare, but has serious implications for social evaluation. The paradox consists in a tension between rationality, respect for individual preferences, and a principle of informational parsimony that excludes individual risk attitudes from the assessment of riskless situations. No evaluation criterion can satisfy these three principles. This impossibility result has implications for the evaluation of social welfare under risk, especially when the preferences of some individuals are not known. It generalizes existing impossibility results, while relying on very weak principles of social rationality and respect for individual preferences. We explore the possibilities opened by weakening each of our three principles and discuss the advantages and drawbacks of these different routes.

Keywords

Social welfarerisksocial rationalityParetofairness
Type
Article
Information
Economics & Philosophy , Volume 38 , Issue 3 , November 2022 , pp. 450 - 465
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Copyright
© The Author(s), 2022. Published by Cambridge University Press

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