Fair criteria for social decisions under uncertainty

Abstract

In a simple model where agents have ordinal and interpersonally noncomparable subjective expected utility preferences over uncertain future incomes, we analyze the implications of equity, efficiency, separability, and social rationality. Our efficiency conditions are fairly weak, because there are criticisms on the standard ex ante Pareto principle in the literature.Our social welfare criteria from the axioms satisfy ex ante equity, but violate Statewise Dominance, often referred to as ”the minimal criterion” of rationality under uncertainty.