79. Universal Fairness
Contributed abstract in session MA-33: Social Networks and Decisions, stream Decision Analysis.
Monday, 8:30-10:00Room: Maurice Keyworth 1.31
Authors (first author is the speaker)
| 1. | Rakesh Sarin
|
| Anderson Graduate School of Management, UCLA |
Abstract
Suppose you could be anyone in the world. You do not know your income, social class, gender, race. Particulars of your circumstance are hidden from you, so you are behind a veil of ignorance. In the choice of an economic arrangement, you face decision making under uncertainty. You wish to maximize your expected utility. You recognize that an excessive redistribution lowers total output. What is the optimal plan that you would choose?
I have obtained some results for optimal redistribution that a rational person would /should choose to maximize her happiness over lifetime. Redistribution reduces total output because of inefficiency and incentive effects. So, there is an optimal tradeoff. Nevertheless, everyone desires security and basic necessities to live a life of dignity and self-respect.
The key result is that a social minimum is derived (not assumed exogenously). I will argue that capitalism tempered by redistribution as in many European countries is preferred over laissez faire economic system.
Keywords
- Decision Analysis
- Decision Theory
- Multi-Objective Decision Making
Status: accepted
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