12. Utility and Group Preference

  1. James R. Thompson

Published Online: 29 NOV 2011

DOI: 10.1002/9781118109656.ch12

Empirical Model Building: Data, Models, and Reality, Second Edition

Empirical Model Building: Data, Models, and Reality, Second Edition

How to Cite

Thompson, J. R. (2011) Utility and Group Preference, in Empirical Model Building: Data, Models, and Reality, Second Edition, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118109656.ch12

Publication History

  1. Published Online: 29 NOV 2011
  2. Published Print: 24 OCT 2011

ISBN Information

Print ISBN: 9780470467039

Online ISBN: 9781118109656

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Keywords:

  • aggregate choice behavior;
  • Arrow's impossibility theorem;
  • group preference;
  • Kenneth Arrow;
  • St. Petersburg paradox;
  • Thomas Jefferson;
  • utility;
  • Vilfredo Pareto;
  • Von Neumann—Morgenstern utility

Summary

This chapter on utility, starts with enlightenment assurance as to the way rational people should make choices. The buttressing of Bernoulli by von Neumann and Morgenstern seems very promising indeed. The chapter talks about Kenneth Arrow, Vilfredo Pareto and Thomas Jefferson. It discusses some problems with aggregate choice behavior, and explains the St. Petersburg paradox. The chapter considers the pooling of individual choices to obtain pooled choices of groups of individuals. A key part of the treatment here shows Kenneth Arrow's proof that rational rules for preferences among individuals do not translate into the same rules for the group.

Controlled Vocabulary Terms

Morgenstern Distributions