Accidents of Birth, Life Chances and the Impartial Observer
28 Pages Posted: 31 Jul 2003
Date Written: May 2003
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: Suggested Citation