Decide as You Would with Full Information! An Argument against Ex Ante Pareto

Abstract

Policy-makers must sometimes choose between an alternative which has somewhat lower expected value for each person, but which will substantially improve the outcomes of the worst off, or an alternative which has somewhat higher expected value for each person, but which will leave those who end up worst off substantially less well off. The popular ex ante Pareto principle requires the choice of the alternative with higher expected utility for each. We argue that ex ante Pareto ought to be rejected because it conflicts with the requirement that, when possible, one ought to decide as one would with full information. We apply our argument in an analysis of US policy on screening for breast cancer.

Keywords: Pareto Principle, Egalitarianism, Decision-Making Under Risk, Social Choice Theory