Fair Utilitarianism

Marc Fleurbaey (1) , Stéphane Zuber (1, 2)

1 PSE - Paris School of Economics
2 CES - Centre d'économie de la Sorbonne

Utilitarianism plays a central role in economics, but there is a gap between theory, where utilitarianism is dominant, and applications, where monetary criteria are often used. For applications, a key difficulty is to define how utilities should be measured and compared. Drawing on Harsanyi’s (1955) approach, we introduce a new normalization of utilities ensuring that: (i) a transfer from a rich population to a poor population is welfare enhancing, and (ii) populations with more risk-averse people have lower welfare. We study some implications of this “fair utilitarianism” for risk sharing, collective risk aversion, and the design of health policy.

Mots clés: Fairness; social risk; utilitarianism

Domaines: Economies et finances

Marc Fleurbaey, Stéphane Zuber. Fair Utilitarianism. American Economic Journal: Microeconomics, 2021, 13 (2), pp.370-401. ⟨10.1257/mic.20170234⟩. ⟨halshs-01441070v1⟩