Interpersonal Comparison of Utilities

Abstract

The exclusion of interpersonal comparisons of utility from formal decision theory stems partly from methodological, partly from ideological considerations. The former are grounded in the circumstance that empirically based definitions of utility lead, in general, to the determination of utilities of individuals on at most an interval scale. In some formulations only ordinally defined utilities are assumed. Logical considerations are grounded in an explicit or implicit reluctance to admit a social welfare function into economic or political theory. Social practice, however, is almost always based on at least implicit interpersonal comparison of utilities. Also laboratory experiments in decision making in situations with conflicts of interests typically reveal or suggest interdependence of different actors’ preferences for outcomes. It is argued that models based on a recognition of interpersonal comparisons should be incorporated into formal and applied decision theory.