Extreme inequality aversion without separability |
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Authors: | Kristof Bosmans |
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Institution: | (1) Center for Economic Studies, Katholieke Universiteit Leuven, Naamsestraat 69, 3000 Leuven, Belgium |
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Abstract: | Hammond (J Econ Theory 11, 465–467, 1975), Meyer (J Econ Theory 11, 119–132, 1975), and Lambert (The distribution and redistribution
of income Manchester University Press, Manchester, 2001) provide the formal result connecting leximin and the idea of extreme
inequality aversion for social preferences of the expected utility type. Using an analogous approach, we show that for social
preferences not necessarily satisfying the separability axiom that underlies expected utility theory, the case of extreme
inequality aversion is covered by the class of weakly maximin social preferences—i.e., the class of social preferences that give priority to the worst off in all cases in which the worst
off is not indifferent.
I wish to thank Bart Capéau, Frank Cowell, Peter Lambert, Luc Lauwers, Erik Schokkaert, Frans Spinnewyn, and Bertil Tungodden
for valuable comments. Remaining shortcomings are mine. Financial support from the Fund for Scientific Research - Flanders
(grant G.0005.04) and the Interuniversity Attraction Poles network funded by the Federal Public Planning Service, Belgian
Science Policy (grant P5/21-A) is gratefully acknowledged. |
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Keywords: | Inequality aversion Leximin Maximin Risk aversion |
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