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.

The Comprehensiveness Dilemma of Cost-Benefit Analysis

Most project impacts on environment, climate, and health are not valued in markets or in choice situations similar to market transactions. Analysts have to go beyond revealed preferences to stated preference interviews and even to deliberative processes in order to elicit preferences from which the trade-off values (‘prices’) of the expanded cost-benefit analysis (CBA) can be deduced. The comprehensiveness dilemma of social CBA arises with the choice between calculation of ‘prices’ from revealed preferences and communicative construction of ‘prices’ on the basis of preferences stated in deliberation. New methods for eliciting preferences, such as deliberative monetary valuation, yield preferences influenced by ethical and political values. The interpretation of the analytic results then becomes problematic. The comprehensiveness dilemma is that planners must choose between a narrow CBA making good economic sense, and a comprehensive CBA with dubious economic content. By aiming for completeness, CBA changes character from being a summation of changes in individual wellbeing to being a mix of this and the summation of monetary expressions of ethical and political viewpoints and attitudes

The Analytic Hierarchy Process: A Mathematical Model for Decision Making Problems

The ability to make the right decision is an asset in many areas and lines of profession including social work, business, national economics, and international security. However, decision makers often have difficulty choosing the best option since they might not have a full understanding of their preferences, or lack a systematic approach to solve the decision making problems at hand. The Analytic Hierarchy Process (AHP) provides a mathematical model that helps the decision makers arrive at the most logical choice, based on their preferences. We investigate the theory of positive, reciprocal matrices, which provides the theoretical justification of the method of the AHP. At its heart, the AHP relies on three principles: Decomposition, Measurement of preferences, and Synthesis. Throughout the first five chapters of this thesis, we use a simple example to illustrate these principles. The last chapter presents a more sophisticated application of the AHP, which in turn illustrates the Analytic Network Process, a generalization of the AHP to systems with dependence and feedback

An Analytic Approach to Selecting a Nonprofit

Charity giving continues to be an important aspect of the economic and social fabric of the United States. The number and total assets of nonprofits registered with the Internal Revenue Service (IRS) under the section 501(c)(3) of the tax code have grown significantly over the past decade. Given the significant share of donations in supporting the activities of nonprofits, it is important for donors to have a better understanding of their operations and governance. As the number of nonprofits with similar objectives increases, it becomes overly complicated for donors to make a choice that is consistent with their own purpose for giving. The goal of this paper is to develop an analytic framework for selecting a nonprofit from among competing alternatives. Specifically, we propose a process in which consultants or financial advisors help donors evaluate nonprofits using a set of financial and governance criteria to generate a ranked short list of alternatives for further evaluation. Donors differ in their criteria for evaluating the performance of nonprofits. The methodology we use allows donors to incorporate their preferences for specific criteria to the selection of a nonprofit in a consistent manner.http://deepblue.lib.umich.edu/bitstream/2027.42/64420/1/wp951.pd

AN ANALYTIC APPROACH TO SELECTING A NONPROFIT

Charity giving continues to be an important aspect of the economic and social fabric of the United States. The number and total assets of nonprofits registered with the Internal Revenue Service (IRS) under the section 501(c)(3) of the tax code have grown significantly over the past decade. Given the significant share of donations in supporting the activities of nonprofits, it is important for donors to have a better understanding of their operations and governance. As the number of nonprofits with similar objectives increases, it becomes overly complicated for donors to make a choice that is consistent with their own purpose for giving. The goal of this paper is to develop an analytic framework for selecting a nonprofit from among competing alternatives. Specifically, we propose a process in which consultants or financial advisors help donors evaluate nonprofits using a set of financial and governance criteria to generate a ranked short list of alternatives for further evaluation. Donors differ in their criteria for evaluating the performance of nonprofits. The methodology we use allows donors to incorporate their preferences for specific criteria to the selection of a nonprofit in a consistent manner.

Economists\u27 Odd Stand on the Positive-Normative Distinction: A Behavioral Economics View

This chapter examines economists’ indefensible attachment to the positive-normative distinction, and suggests a behavioral economics explanation of their behavior on the subject. It reviews the origins of the distinction in Hume’s guillotine and logical positivism, and shows how they form the basis for Robbins’ understanding of value neutrality. It connects philosophers’ rejection of logical positivism to their rejection of the positive-normative distinction, explains and modifies Putnam’s view of fact-value entanglement, and identifies four main ethical value judgments that contemporary economists employ. The behavioral explanation of economists’ denial of these value judgments emphasizes loss aversion and economists’ social identity as economist

Why the Realist-Instrumentalist Debate about Rational Choice Rests on a Mistake

Within the social sciences, much controversy exists about which status should be ascribed to the rationality assumption that forms the core of rational choice theories. Whilst realists argue that the rationality assumption is an empirical claim which describes real processes that cause individual action, instrumentalists maintain that it amounts to nothing more than an analytically set axiom or ‘as if’ hypothesis which helps in the generation of accurate predictions. In this paper, I argue that this realist-instrumentalist debate about rational choice theory can be overcome once it is realised that the rationality assumption is neither an empirical description nor an ‘as if’ hypothesis, but a normative claim

Study protocol: developing a decision system for inclusive housing: applying a systematic, mixed-method quasi-experimental design

Background Identifying the housing preferences of people with complex disabilities is a much needed, but under-developed area of practice and scholarship. Despite the recognition that housing is a social determinant of health and quality of life, there is an absence of empirical methodologies that can practically and systematically involve consumers in this complex service delivery and housing design market. A rigorous process for making effective and consistent development decisions is needed to ensure resources are used effectively and the needs of consumers with complex disability are properly met. Methods/Design This 3-year project aims to identify how the public and private housing market in Australia can better respond to the needs of people with complex disabilities whilst simultaneously achieving key corporate objectives. First, using the Customer Relationship Management framework, qualitative (Nominal Group Technique) and quantitative (Discrete Choice Experiment) methods will be used to quantify the housing preferences of consumers and their carers. A systematic mixed-method, quasi-experimental design will then be used to quantify the development priorities of other key stakeholders (e.g., architects, developers, Government housing services etc.) in relation to inclusive housing for people with complex disabilities. Stakeholders randomly assigned to Group 1 (experimental group) will participate in a series of focus groups employing Analytical Hierarchical Process (AHP) methodology. Stakeholders randomly assigned to Group 2 (control group) will participate in focus groups employing existing decision making processes to inclusive housing development (e.g., Risk, Opportunity, Cost, Benefit considerations). Using comparative stakeholder analysis, this research design will enable the AHP methodology (a proposed tool to guide inclusive housing development decisions) to be tested. Discussion It is anticipated that the findings of this study will enable stakeholders to incorporate consumer housing preferences into commercial decisions. Housing designers and developers will benefit from the creation of a parsimonious set of consumer-led housing preferences by which to make informed investments in future housing and contribute to future housing policy. The research design has not been applied in the Australian research context or elsewhere, and will provide a much needed blueprint for market investment to develop viable, consumer directed inclusive housing options for people with complex disability

Integrating patients' views into health technology assessment: Analytic hierarchy process (AHP) as a method to elicit patient preferences

Background: Patient involvement is widely acknowledged to be a valuable component in health technology assessment (HTA) and healthcare decision making. However, quantitative approaches to ascertain patients' preferences for treatment endpoints are not yet established. The objective of this study is to introduce the analytic hierarchy process (AHP) as a preference elicitation method in HTA. Based on a systematic literature review on the use of AHP in health care in 2009, the German Institute for Quality and Efficiency in Health Care (IQWiG) initiated an AHP study related to its HTA work in 2010. - \ud Methods: The AHP study included two AHP workshops, one with twelve patients and one with seven healthcare professionals. In these workshops, both patients and professionals rated their preferences with respect to the importance of different endpoints of antidepressant treatment by a pairwise comparison of individual endpoints. These comparisons were performed and evaluated by the AHP method and relative weights were generated for each endpoint. - \ud Results: The AHP study indicates that AHP is a well-structured technique whose cognitive demands were well handled by patients and professionals. The two groups rated some of the included endpoints of antidepressant treatment differently. For both groups, however, the same six of the eleven endpoints analyzed accounted for more than 80 percent of the total weight. - \ud Conclusions: AHP can be used in HTA to give a quantitative dimension to patients' preferences for treatment endpoints. Preference elicitation could provide important information at various stages of HTA and challenge opinions on the importance of endpoints

Analytic Narratives: What they are and how they contribute to historical explanation

The expression "analytic narratives" is used to refer to a range of quite recent studies that lie on the boundaries between history, political science, and economics. These studies purport to explain specific historical events by combining the usual narrative approach of historians with the analytic tools that economists and political scientists draw from formal rational choice theories. Game theory, especially of the extensive form version, is currently prominent among these tools, but there is nothing inevitable about such a technical choice. The chapter explains what analytic narratives are by reviewing the studies of the major book Analytic Narratives (1998), which are concerned with the workings of political institutions broadly speaking, as well as several cases drawn from military and security studies, which form an independent source of the analytic narratives literature. At the same time as it gradually develops a definition of analytic narratives, the chapter investigates how they fulfil one of their main purposes, which is to provide explanations of a better standing than those of traditional history. An important principle that will emerge in the course of the discussion is that narration is called upon not only to provide facts and problems, but also to contribute to the explanation itself. The chapter distinguishes between several expository schemes of analytic narratives according to the way they implement this principle. From all the arguments developed here, it seems clear that the current applications of analytic narratives do not exhaust their potential, and in particular that they deserve the attention of economic historians, if only because they are concerned with microeconomic interactions that are not currently their focus of attention