Generalized Utilitarianism and Harsanyi's Impartial Observer Theorem

Abstract

We provide an axiomatization of generalized utilitarian social welfare functions in the context of Harsanyi's impartial observer theorem. To do this, we reformulate Harsanyi's problem such that lotteries over identity (accidents of birth) and lotteries over outcomes (life chances) are independent. We show how to accommodate (first) Diamond's critique concerning fairness and (second) Pattanaik's critique concerning differing attitudes toward risk. In each case, we show what separates them from Harsanyi by showing what extra axioms return us to Harsanyi. Thus we provide two new axiomatizations of Harsanyi's utilitarianism.

Keywords: Generalized utilitarianism, Impartial observer, Social welfare function, Fairness, Ex ante egalitarianism

JEL Classification: D63, D71