Abstract
In this work we reconsider Harsanyi’s celebrated (J Polit Econ 61:434–435, 1953; J Polit Econ 63:309–321, 1955; Rational Behavior and Bargaining Equilibrium in Games and Social Situations. Cambridge University Press, Cambridge, 1977) utilitarian impartial observer theorem. Departing from Harsanyi’s individual-centered approach, we argue that when societal decisions are at stake, postulates must not be drawn from individualistic behavior. Rather, they should be based on societal norms. Continuing this line of thinking, we state and prove a utilitarian result that, rather than being based on the independence assumption, is based on the societal norm of procedural fairness.
Highlights
In this work we reconsider Harsanyi’s celebrated (1953, 1955, 1977) utilitarian impartial observer theorem
As stated in Introduction we argue that when societal decisions are at stake, postulates must be drawn from society-centered behavior
We have chosen to focus on the notion of procedural fairness and added to it the requirement that the impartial observer is indifferent between identity and action lotteries
Summary
In this work we reconsider Harsanyi’s celebrated (1953, 1955, 1977) utilitarian impartial observer theorem. Sen argued that Policy (2) provides both individuals with a “fair shake” and the impartial observer might prefer it.4 This notion of procedural fairness is expressed in our work by the notion of (weak) convexity over action lotteries: if, given the identity equiprobable lottery γ e, the observer is indifferent between two action lotteries and (while two individuals disagree on their ranking) their mixtures cannot be worse than them.. In his own response to Diamond’s concern about fairness, Harsanyi (1975) argued that even if randomizations were of value for promoting fairness (which he doubted), any explicit randomization is superfluous since “the great lottery of (pre-)life” may be viewed as having already given each child an equal chance of being each individual That is, it does not matter whether a good is allocated by a (possibly imaginary) lottery over identities or by a (real) lottery over actions.
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