Accidents of Birth, Life Chances and the Impartial Observer

28 Pages Posted: 31 Jul 2003

See all articles by Simon Grant

Simon Grant

Rice University - Department of Economics; Australian National University

Atsushi Kajii

Institute of Economic Research, Kyoto University; Singapore Management University

Ben Polak

Yale University - Department of Economics

Date Written: May 2003

Abstract

We confront two common objections to Harsanyi's impartial observer theorem; one to do with 'fairness', and the other to do with different individuals' having different attitudes toward risk. Both these objections can be accommodated if we drop the reduction axiom; in particular, if we distinguish between 'accidents of birth' and real-world 'life chances'. We do not drop the independence axiom that has often been seen as the source of these problems. Just as Harsanyi's theorem yields a utilitarian form of social welfare function, so our approach axiomatizes a generalized utilitarian form. If in addition, welfare is cardinally measurable, then we can interpret the shape of our generalized utilitarian functional form in terms of attitudes toward risk and toward interim inequality.

Keywords: impartial observer, generalized utilitarian social welfare functions, reduction axiom, inequality of what?

JEL Classification: D63, D71

Suggested Citation

Grant, Simon Harold and Kajii, Atsushi and Polak, Benjamin, Accidents of Birth, Life Chances and the Impartial Observer (May 2003). ISER Discussion Paper No. 582, Available at SSRN: https://ssrn.com/abstract=415940 or http://dx.doi.org/10.2139/ssrn.415940

Simon Harold Grant

Rice University - Department of Economics ( email )

6100 South Main Street
Houston, TX 77005
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Australian National University ( email )

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Canberra, Australian Capital Territory 0200
Australia
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Atsushi Kajii (Contact Author)

Institute of Economic Research, Kyoto University ( email )

Yoshida-Honmachi
Sakyo-ku
Kyoto 606-8501
JAPAN

HOME PAGE: http://www.kier.kyoto-u.ac.jp/~kajii/

Singapore Management University ( email )

School of Economics
90 Stamford Road
Singapore, 178903
Singapore

Benjamin Polak

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3590 (Phone)
203-432-5779 (Fax)

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