Individual utility in a context of asymmetric sensitivity to pleasure and pain: an interpretation of Bentham's felicific calculus

Abstract

This paper aims at exploring, in a formal way, Bentham's statement that 'the pleasure of gaining is not equal to the evil of losing', which belongs to those aspects of the principle of utility left aside by Jevons' reconstruction. Consequently, the agent's preference order will be viewed as depending on his initial situation, and on asymmetric sensitivity to gains and losses, relative to this situation. This leads 1) to discuss the coexistence of multiple preference orders, illustrated by Bentham's analysis of the optimal labour contract; and 2) to introduce true deliberation as a consequence of the gap between positive choice and rival assessments of utility.Bentham Endogeneous Preferences Individual Utility Pain And Pleasure Preference Reversal Utilitarianism,

Sensitivity to prosperity and adversity: What would a Smithian function of happiness look like?

“…Kahneman and Tversky's approach (1991), on the one hand, like Lapidus and Sigot's (2000), on the other hand, could open the path to an account of Smith's asymmetry between pleasure and pain, since both put to the fore the unequal effects of losses and gains.…”

“…This would give rise here to U b (Á) and U w (Á), respectively, indexed on b and w, so that 7 U b (w) 4 U w (b). Alternatively, Lapidus and Sigot (2000) would offer the possibility of representing preferences by a single utility function, provided this latter is defined on trajectories, which consist here of three monotonous trajectories, the last one being degenerated ({b, w}, {w, b}, and {b}), and one concatenation of two monotonous trajectories ({b, w, b}). The asymmetric effect would therefore be represented by the following inequalities: 7 U({b, w}) 4 U({w, b}) and U({b}) 4 U({b, w, b}).…”

“…They deal respectively with (1) the principle of loss aversion, first developed in the context of the prospect theory by Kahneman and Tversky's (1979); (2) the Benthamian principle that the pleasure of gaining is not equal to the evil of losing, as interpreted by Lapidus and Sigot (2000); and (3) the propriety of concavity, in a standard cardinalist framework. The relevance of these three approaches will be discussed with regard to Smith's analysis, in order to represent a Smithian individual's asymmetric sensitivity to prosperity and adversity.…”

Ricardo's critique of Bentham's French manuscript: Secure currency versus secure banks

“…This fact may be linked to the more general lack of interest for his economic writings: until recently, Keynes's statementBentham 'was not an economist at all' (Keynes 1926: 279) -seems to have been widely accepted. However, some scholars have begun to work through Bentham's huge economic writings; in so doing, they all emphasise the coherence between Bentham's economic thought and his utilitarianism (see, for instance, Guidi 1991;Sigot 1993;Lapidus and Sigot 2000;Leloup 2002).…”

Jevons’s Debt to Bentham: Mathematical Economy, Morals and Psychology

“…One might have expected other justi¢cations related to the fact that fecundity, purity and extent raise two problems: externalities and exogeneity of preferences (seeLapidus and Sigot, 2000). Both problems make the theory more complicated; this would thus be a reason for Jevons to rule these three dimensions out of economics.…”