Fri Nov 1, 2013
60 Evans Hall, 4:10–6 PM
Lara Buchak (UC-Berkeley)
Risk and Inequality
Decision theory concerns the evaluation of gambles. When choosing among gambles, individuals are forced to consider how they will turn out under various circumstances, and decide how to trade off the possibility that a gamble will turn out well against the possibility that it will turn out poorly. How should we aggregate the values one might get in different possible circumstances, in order to arrive at a single value for a gamble? The orthodox view is that there is only one acceptable way to do this: rational individuals must maximize expected (i.e. average) utility. The contention of my recent book, however, is that the orthodox theory (expected utility theory) dictates an overly narrow way in which considerations about risk can play a role in an individual’s choices. There, I argued for an alternative, more permissive, theory of decision-making: risk-weighted expected utility theory (REU theory). This theory allows individuals to pay proportionally more attention to the worst-case scenario than the best-case scenario.
Social choice theory concerns the evaluation of social distributions: distributions of goods or outcomes to individuals. To determine which social distribution is better, we must consider how distributions go for various individuals, and decide how to trade off the fact that one distribution is better for some people against the fact that is it worse for others. How should we aggregate the values that go to each person, in order to arrive as a single value for a social distribution and to say which of two social distributions is better? A traditional answer to this question is that the value of a social distribution is the average of the utility values that each individual in the society receives (utilitarianism). And one traditional justification of utilitarianism relies on the assumption that expected utility theory is the correct decision theory.
There are two ways in which decision theory has been used to justify a particular aggregation method in social choice theory. The first is to propose that facts about the values of social distributions are determined or discerned from individuals’ preferences about gambles. This is the method employed by John Rawls and John Harsanyi, for example: both consider individual preferences about gambles over social distributions in which one does not know which place one will occupy in society, and use these to determine the aggregative social welfare function. The second way to use decision theory to justify a particular aggregation method in social choice theory is to examine the conditions on the preference relation in decision theory, and explore whether analogous conditions might hold of the betterness relation. This is the rough strategy behind John Broome’s justification of utilitarianism in his book Weighing Goods.
Existing philosophical versions of these justifications are based on views about decision-making that I’ve argued are incorrect: thus, I claim, their conclusions for social choice theory are unjustified.
In this work-in-progress talk, I explore the prospects for using REU theory to justify an alternative evaluation of social distributions, one that allows us to pay special attention (but not exclusive attention) to the worst-off person as opposed to the best-off person.