Abstract
Derived from Epstein and Segal (1992), quadratic social welfare functions address classical criticisms to Harsanyi’s utilitarianism and incorporate concerns for ex ante fairness. The original axiomatization focuses on the social decision to allocate an indivisible good among equally deserving individuals. We show how the model extends naturally in an income distribution setting, where social preference seeks to account for equality in the distribution of opportunities between social types. Within this approach, we illustrate the interaction between aversions to inequality of outcomes and inequality of opportunities, and derive an overall index of inequality of outcomes and opportunities. A survey is proposed to test whether people’s social preferences are consistent with the axioms underlying the quadratic welfare representation.
Raffaello Seri
Professor of Econometrics
My research interests include statistics, numerical analysis, operations research, psychology, economics and management.