Welfare egalitarianism with other-regarding preferences

Abstract

We study the fair allocation of a one-dimensional and perfectly divisible good when individuals have other-regarding preferences. Assuming no legitimate claims and purely ordinal preferences, how should society measure social welfare so as to satisfy basic principles of efficiency and fairness? We define the egalitarian equivalent as the size of the egalitarian allocation which leaves the individual indifferent to the current allocation. In two simple models of average and positional externalities, we characterize the class of social preferences which give full priority to the individual with the lowest egalitarian equivalent in the economy.

Global Income Poverty Measurement with Preference Heterogeneity: Theory and Application

“…All poverty measures satisfy this property in traditional settings, that is, when only own income matters, or when both own income and relative income matters and but their framework features self-centered preferences over multidimensional goods and they weaken the Domination principle. Decerf and van der Linden (2016) and Treibich (2019) consider a framework with other-regarding preferences, but they study social welfare measurement. In particular, Treibich (2019) considers a setting with other-regarding preferences over own income and relative income, but he weakens the Domination principle.…”

Levels of other-regarding preferences and the structure of the interaction

“…While the fi rst is more common for experimental economics literature, dealing with monetary payoffs given out in the experiments, the second is usual for the literature on applications.12 It should be mentioned, however, that there is no consensus on the correct formulation of social welfare. See, among others,Decerf and Van der Linden (2016) andTreibich (2014).…”