Welfare Criteria from Choice: the Sequential Solution
Sean Horan*, Yves Sprumont
Date: 2015-05-09 2:30 pm – 3:00 pm
Last modified: 2015-05-04
Abstract
We study the problem of transforming a choice function defined on the subsets of a finite universal set into an ordering on that set. Under the sequential solution, the best alternative is the alternative selected from the universal set; the second best is the one chosen when the best alternative is removed; and so on.
We show that this is the only completion of Bernheim and Rangel's (2009) welfare relation that satisfies two natural axioms: neutrality, which ensures that the names of the alternatives are welfare-irrelevant; and persistence, which stipulates that every choice function between two welfare-identical choice functions must exhibit the same welfare ordering.
We show that this is the only completion of Bernheim and Rangel's (2009) welfare relation that satisfies two natural axioms: neutrality, which ensures that the names of the alternatives are welfare-irrelevant; and persistence, which stipulates that every choice function between two welfare-identical choice functions must exhibit the same welfare ordering.