Fairness versus Welfare

Kaplow, Louis; Shavell, Steven

doi:10.2307/1342642

Cited by 306 publications

(119 citation statements)

References 0 publications

Supporting

Mentioning

110

Contrasting

Unclassified

Order By: Relevance

“…The introduction of fairness, however, will most likely have a negative impact on the efficiency of the system. Indeed, the efficiency-fairness tradeoff is a central issue of resource allocation problems [8]. We next discuss efficiency-maximizing and fair allocations.…”

Section: Efficiency-maximizing and Fair Allocationsmentioning

confidence: 99%

On the Efficiency-Fairness Trade-off

2012

View full text Add to dashboard Cite

A central decision maker allocates resources to each of n players who derive utility from their allocation. Consequently, her actions may be viewed as choosing an allocation of utilities u = (u 1 , u 2 , . . . , u n ) from some set of feasible allocations U ∈ R n + . Consider a decision maker that chooses an allocation u ∈ U to maximizeThe above family of objective functions proposed originally by Atkinson and parameterized by α ∈ R + , permits the decision maker to tradeoff efficiency (by lowering α) for fairness (by increasing α). The family of Atkinson utility functions is canonical in that it captures the efficient or "utilitarian" allocation (α = 0), the "max-min" fair allocation (α → ∞), and the proprotionally fair (or Nash bargaining) allocation (α → 1).This paper characterizes the tradeoff between efficiency and fairness in this general setting. In particular, we demonstrate that under reasonable assumptions on U , the total utility to players under a fair allocation, FAIR(U, α), and the total utility to players under a perfectly efficient allocation, FAIR(U, 0) SYSTEM(U ), must satisfy, and moreover, that this bound is essentially tight.

show abstract

Section: Efficiency-maximizing and Fair Allocationsmentioning

confidence: 99%

On the Efficiency-Fairness Trade-off

2012

View full text Add to dashboard Cite

show abstract

“…This economic theory is based on the concept of welfarism, which posits that consequences resulting from a specific course of action (e.g., policies, interventions, laws), when significant, are an impact on overall human welfare (Kaplow & Shavell, 2002). Therefore, any course of action needs to be evaluated based on its actual or potential consequences.…”

Section: Theoretical Foundationsmentioning

confidence: 99%

Cost-Effectiveness of Early Versus Delayed Functional Restoration for Chronic Disabling Occupational Musculoskeletal Disorders

2014

View full text Add to dashboard Cite

“…Echoing a common refrain (e.g., Kaplow & Shavell 2002), Sunstein questions the use of "exotic cases of the kind never or rarely encountered in ordinary life" to reveal the structure of our moral intuitions. The objection sounds plausible, but on reflection seems difficult to understand.…”

Section: Moralmentioning

confidence: 99%

“…In a widely held view, a primary task of ethics is to identify the proper general theory and to use it to correct intuitions in cases in which they go wrong (Hooker 2000). Consider here the provocative claim that much of everyday morality, nominally concerned with fairness, should be seen as a set of heuristics for the real issue, which is how to promote utility (see Baron 1998; to the same general effect, with numerous examples from law, see Kaplow & Shavell 2002).2. Note also that loss aversion is quite robust in the real world (Benarzi & Thaler 2000;Camerer 2000), and it has not been shown to be solely or mostly a result of the speaker's clues.…”

mentioning

confidence: 99%

“…However, Sunstein's definitions of "weak consequentialism" -his proposed benchmark -are too vague and uncontroversial to do the work required of them in this context. We are left without a clear sense of whether Sunstein thinks moral competence even exists and, if so, which theory adequately describes it.Echoing a common refrain (e.g., Kaplow & Shavell 2002), Sunstein questions the use of "exotic cases of the kind never or rarely encountered in ordinary life" to reveal the structure of our moral intuitions. The objection sounds plausible, but on reflection seems difficult to understand.…”

mentioning

confidence: 99%

See 1 more Smart Citation

what's in a heuristic?

Hahn¹,

Frost²,

Maio³

2005

Behav Brain Sci

View full text Add to dashboard Cite

With respect to questions of fact, people use heuristics -mental short-cuts, or rules of thumb, that generally work well, but that also lead to systematic errors. People use moral heuristics too -moral short-cuts, or rules of thumb, that lead to mistaken and even absurd moral judgments. These judgments are highly relevant not only to morality, but to law and politics as well. Examples are given from a number of domains, including risk regulation, punishment, reproduction and sexuality, and the act/omission distinction. In all of these contexts, rapid, intuitive judgments make a great deal of sense, but sometimes produce moral mistakes that are replicated in law and policy. One implication is that moral assessments ought not to be made by appealing to intuitions about exotic cases and problems; those intuitions are particularly unlikely to be reliable. Another implication is that some deeply held moral judgments are unsound if they are products of moral heuristics. The idea of error-prone heuristics is especially controversial in the moral domain, where agreement on the correct answer may be hard to elicit; but in many contexts, heuristics are at work and they do real damage. Moral framing effects, including those in the context of obligations to future generations, are also discussed.Cass R. Sunstein is Karl N. Llewellyn Distinguished Service Professor, Law School and Department of Political Science, University of Chicago. His many books include Laws of Fear (2005), Why Societies Need Dissent (2003), and Risk and Reason (2002). Much of his research explores the intersection of psychology, economics, and law; he has been particularly interested in the role of cognitive errors and social influences on juries, legislators, judges, and those who are the objects of law's commands. He is now working on a book on the production of social knowledge, with special reference to information aggregation across persons.that some of our deeply held moral beliefs might be products of heuristics that sometimes produce mistakes.If moral heuristics are in fact pervasive, then people with diverse foundational commitments should be able to agree, not that their own preferred theories are wrong, but that they are often applied in a way that reflects the use of heuristics. Utilitarians ought to be able to identify heuristics for the maximization of utility; deontologists should be able to point to heuristics for the proper discharge of moral responsibilities; and those uncommitted to any large-scale theory should be able to specify heuristics for their own more modest normative commitments. And if moral heuristics exist, blunders are highly likely not only in moral thinking, but in legal and political practice as well. Conventional legal and political arguments are often a product of heuristics masquerading as universal truths. Hence, I will identify a set of political and legal judgments that are best understood as a product of heuristics, and that are often taken, wrongly and damagingly, as a guide to political and legal p...

show abstract

Fairness versus Welfare

Cited by 306 publications

References 0 publications

On the Efficiency-Fairness Trade-off

On the Efficiency-Fairness Trade-off

Cost-Effectiveness of Early Versus Delayed Functional Restoration for Chronic Disabling Occupational Musculoskeletal Disorders

what's in a heuristic?

Contact Info

Product

Resources

About