A representative individual from Arrovian aggregation of parametric individual utilities

This article investigates the representative-agent hypothesis for an infinite population which has to make a social choice from a given finite-dimensional space of alternatives. It is assumed that some class of admissible strictly concave utility functions is exogenously given and that each individual's preference ordering can be represented cardinally through some admissible utility function. In addition, we assume that (i) the class of admissible utility functions allows for a smooth parametrization, and (ii) the social welfare function satisfies Arrovian rationality axioms. We prove that there exists an admissible utility function r, called representative utility function, such that any alternative which maximizes r also maximizes the social welfare function. The proof utilizes a special nonstandard model of the reals, viz. the ultraproduct of the reals with respect to the ultrafilter of decisive coalitions; this construction explicitly determines the parameter vector of the representative utility function.representative individual, Arrovian social choice, ultrafilter, ultraproduct, nonstandard analysis

Impossibility results for infinite-electorate abstract aggregation rules

It is well known that the literature on judgment aggregation inherits the impossibility results from the aggregation of preferences that it generalises. This is due to the fact that the typical judgment aggregation problem induces an ultrafilter on the the set of individuals, as was shown in a model theoretic framework by Herzberg and Eckert (2009), generalising the Kirman-Sondermann correspondence and extending the methodology of Lauwers and Van Liedekerke (1995). In the finite case, dictatorship then immediately follows from the principality of an ultrafilter on a finite set. This is not the case for an infinite set of individuals, where there exist free ultrafilters, as Fishburn already stressed in 1970. The main problem associated with free ultrafilters in the literature on aggregation problems is however, the arbitrariness of their selection combined with the limited anonymity they guarantee (which already led Kirman and Sondermann (1972) to speak about invisible dictators). Following another line of Lauwers and Van Liedekerke's (1995) seminal paper, this note explores another source of impossibility results for free ultrafilters: The domain of an ultraproduct over a free ultrafilter extends the individual factor domains, such that the preservation of the truth value of some sentences by the aggregate model --- if this is as usual to be restricted to the original domain --- may again require the exclusion of free ultrafilters, leading to dictatorship once again.Arrow-type preference aggregation, judgment aggregation, model theory, first-order predicate logic, filter, ultrafilter, reduced product, ultraproduct, existential quantifier

Proximity Preservation in an Anonymous Framework

This paper gives a formulation for the condition of preservation of preference proximity which, unlike previous formulations, respects the spirit of anonymity pervading social choice theory. Proximity preservation is however shown to be inconsistent with a very weak condition guaranteeing a minimal non-trivial compensation of pivotal changes.

Smallness of Invisible Dictators

Fishburn (1970) showed that in an infinite society Arrow's axioms for a preference aggregation rule do not necessarily imply a dictator. Kirman and Sondermann (1972) showed that, in this case, nondictatorial rules imply an invisible dictator that, whenever the agent set is an atomless finite measure space, can be viewed as the limit of coalitions of arbitrarily small size. We show first that, when admissible coalitions are restricted to an algebra, there are two sorts of invisible dictators. We next show that, in most cases of interest, we do not need to resort to measures on the agent space to give a precise meaning to the statement that invisible dictators are the limit of arbitrarily small decisive coalitions.Preference aggregation, Arrow´s Theorem, Invisible Dictators, Ultrafilter Property, Strict Neutrality

Social choice of convex risk measures through Arrovian aggregation of variational preferences

It is known that a combination of the Maccheroni-Marinacci-Rustichini (2006) axiomatisation of variational preferences with the Föllmer-Schied (2002,2004) representation theorem for concave monetary utility functionals provides an (individual) decision-theoretic foundation for convex risk measures. The present paper is devoted to collective decision making with regard to convex risk measures and addresses the existence problem for non-dictatorial aggregation functions of convex risk measures - in the guise of variational preferences - satisfying Arrow-type rationality axioms (weak universality, systematicity, Pareto principle). We prove an impossibility result for finite electorates, viz. a variational analogue of Arrow's impossibility theorem. For infinite electorates, the possibility of rational aggregation of variational preferences (i.e. convex risk measures) depends on a uniform continuity condition for the variational preference profiles: We shall prove variational analogues of both Campbell's impossibility theorem and Fishburn's possibility theorem. Methodologically, we adopt the model-theoretic approach to aggregation theory inspired by Lauwers-Van Liedekerke (1995). In an appendix, we apply the Dietrich-List (2010) analysis of logical aggregation based on majority voting to the problem of variational preference aggregation. The fruit is a possibility theorem, but at the cost of considerable and - at least at first sight - rather unnatural restrictions on the domain of the variational preference aggregator.variational preference representation, convex risk measure, multiple priors preferences, Arrow-type preference aggregation, judgment aggregation, abstract aggregation theory, model theory, first-order predicate logic, ultrafilter, ultraproduct

Arrovian Aggregation in Economic Environments: How Much Should We Know About Indifference Surfaces?

Arrow's celebrated theorem of social choice shows that the aggregation of individual preferences into a social ordering cannot make the ranking of any pair of alternatives depend only on individual preferences over that pair, unless the fundamental weak Pareto and nondictatorship principles are violated. In the standard model of division of commodities, we investigate how much information about indifference hypersurfaces is needed to construct social ordering functions satisfying the weak Pareto principle and anonymity. We show that local information such as marginal rates of substitution or the shapes "within the Edgeworth box" is not enough, and knowledge of substantially non-local information is necessary.social choice, preference aggregation, information, independence of irrelevant alternatives, indifference curves

Social Choice with Analytic Preferences

A social welfare function is a mapping from a set of profiles of individual preference orderings to the set of social orderings of a universal set of alternatives. A social choice correspondence specifies a nonempty subset of the agenda for each admissible preference profile and each admissible agenda. We provide examples of economic and political preference domains for which the Arrow social welfare function axioms are inconsistent, but whose choice-theoretic counterparts (with nondictatorship strengthened to anonymity) yield a social choice correspondence possibility theorem when combined with a natural agenda domain. In both examples, agendas are compact subsets of the nonnegative orthant of a multidimensional Euclidean space. In our first possibility theorem, we consider the standard Euclidean spatial model used in many political models. An agenda can be interpreted as being the feasible vectors of public goods given the resource constraints faced by a legislature. Preferences are restricted to be Euclidean spatial preferences. Our second possibility theorem is for economic domains. Alternatives are interpreted as being vectors of public goods. Preferences are monotone and representable by an analytic utility function with no critical points. Convexity of preferences can also be assumed. Many of the utility functions used in economic models, such as Cobb-Douglas and CES, are analytic. Further, the set of monotone, convex, and analytic preference orderings is dense in the set of continuous, monotone, convex preference orderings. Thus, our preference domain is a large subset of the classical domain of economic preferences. An agenda can be interpreted as the set of feasible allocations given an initial resource endowment and the firms' production technologies. To establish this theorem, an ordinal version of the Analytic Continuation Principle is developed.