Robust Social Decisions

Danan, Éric; Gajdos, Thibault; Hill, Brian; Tallon, Jean-Marc

doi:10.1257/aer.20150678

Cited by 52 publications

(58 citation statements)

References 40 publications

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“…They show that a stronger variant of Consensus Pareto implies that the social set of beliefs contains only a weighted average of individuals' beliefs. In the Anscombe and Aumann (1963) framework, Qu (2017) and Danan et al (2016) derive similar representation theorems for social preferences by employing other variants of ex ante Pareto in a context where neither individuals nor society conforms to SEU theory. 6 All these variants of ex ante Pareto are proposed to avoid the pitfalls of ex ante Pareto, and especially the problem of 'spurious unanimity', which is at the basis of the impossibility result.…”

Section: Related Literaturementioning

confidence: 99%

“…Posner and Weyl (2013), Blume et al (2015) and others identify contradictory beliefs as the main cause for purely speculative trades, and they argue in favor of public regulation of financial markets in this case. 7 Gilboa et al (2014) formulate a weaker variant of 6 Specifically, Qu (2017) assumes that both society and individuals conform to the MEU theory, whereas Danan et al (2016) consider the possibility that both society and individuals have Bewley-type preferences. For an excellent introduction to the theory of decision under uncertainty, see Gilboa (2009).…”

Section: Related Literaturementioning

confidence: 99%

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Fair social decision under uncertainty and belief disagreements

Hayashi

Lombardi

2018

Econ Theory

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This paper aims to address two issues related to simultaneous aggregation of utilities and beliefs. The first one is related to how to integrate both inequality and uncertainty considerations into social decision making. The second one is related to how social decision should take disagreements in beliefs into account. To accomplish this, whereas individuals are assumed to abide by Savage model's of subjective expected utility, society is assumed to prescribe, either to each individual when the ex ante individual well-being is favored or to itself when the ex post individual wellbeing is favored, acting in accordance with the maximin expected utility theory of Gilboa and Schmeidler (J Math Econ 18:141-153, 1989). Furthermore, it adapts an ex ante Pareto-type condition proposed by Gayer et al. (J Legal Stud 43:151-171, 2014), which says that a prospect Pareto dominates another one if the former gives a higher expected utility than the latter one, for each individual, for all individuals' beliefs. In the context where the ex ante individual welfare is favored, our ex ante Pareto-type condition is shown to be equivalent to social utility taking the form of a MaxMinMin social welfare function, as well as to the individual set of priors being contained within the range of individual beliefs. However, when the ex post individual welfare is favored, the same Pareto-type condition is shown to be equivalent to social utility Special thanks go to Philippe Mongin, whose comments and suggestions have led to substantial improvements in the paper. We are also grateful to an associate editor and two referees of this journal for their helpful and thoughtful comments and suggestions. We are solely responsible for any remaining deficiencies.

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Section: Related Literaturementioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Fair social decision under uncertainty and belief disagreements

Hayashi

Lombardi

2018

Econ Theory

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“…Our concept is closest to ( Gilboa et al 2010)'s "objectively rational" decision making. (Danan et al 2016) move this concept, which they call Unambiguous Preferences, farther toward a normative application, applying it to define robust social decisions. They focus on a social decision maker that has to synthetize multiple preferences and multiple beliefs.…”

Section: Introductionmentioning

confidence: 99%

“…In (Danan et al 2016), following much of the economics literature, individuals have direct preferences over probability distributions, rather than over outcomes and risk. Thus, one of our contributions is to re-state the concept of Belief Dominance in a general framework with clear distinctions between alternatives, beliefs, and preferences (Howard 1988), so that it can be operationalized as a prescriptive decision rule (Bell, Raiffa, and Tversky 1988).…”

Section: Introductionmentioning

confidence: 99%

“…It can be derived from a set of axioms that, relaxed one at a time and replaced by completeness, lead to Subjective Expected Utility, Minimax, α-Maxmin, or Minimax Regret, respectively. Similarly, (Danan et al 2016) show that if a preference relation is a completion of Belief Dominance, then it can be represented by a general decision rule they call a variable caution rule. This decision rule can be parameterized to represent SEU or Minimax.…”

Section: Introductionmentioning

confidence: 99%

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Finding Common Ground When Experts Disagree: Robust Portfolio Decision Analysis

2017

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Within the IEB framework, the Chair of Energy Sustainability promotes research into the production, supply and use of the energy needed to maintain social welfare and development, placing special emphasis on economic, environmental and social aspects. There are three main research areas of interest within the program: energy sustainability, competition and consumers, and energy firms. The energy sustainability research area covers topics as energy efficiency, CO2 capture and storage, R+D in energy, green certificate markets, smart grids and meters, green energy and biofuels. The competition and consumers area is oriented to research on wholesale markets, retail markets, regulation, competition and consumers. The research area on energy firms is devoted to the analysis of business strategies, social and corporative responsibility, and industrial organization. Disseminating research outputs to a broad audience is an important objective of the program, whose results must be relevant both at national and international level.The Chair of Energy Sustainability of the University of Barcelona-IEB is funded by the following enterprises ACS, CEPSA, CLH, Enagas, Endesa, FCC Energia, HC Energia, Gas Natural Fenosa, and Repsol) through FUNSEAM (Foundation for Energy and Environmental Sustainability). introducing an approach we call Robust Portfolio Decision Analysis. We introduce the idea of Belief Dominance as a prescriptive operationalization of a concept that has appeared in the literature under a number of names. We use this concept to derive a set of non-dominated portfolios; and then identify robust individual alternatives from the non-dominated portfolios. The Belief Dominance concept allows us to synthesize multiple conflicting sources of information by uncovering the range of alternatives that are intelligent responses to the range of beliefs. This goes beyond solutions that are optimal for any specific set of beliefs to uncover defensible solutions that may not otherwise be revealed. We illustrate our approach using a problem in the climate change and energy policy context: choosing among clean energy technology R&D portfolios. We demonstrate how the Belief Dominance concept can uncover portfolios that would otherwise remain hidden and identify robust individual investments.

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Realizing Epistemic Democracy

Pivato

2019

The Future of Economic Design

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Robust Social Decisions

Cited by 52 publications

References 40 publications

Fair social decision under uncertainty and belief disagreements

Fair social decision under uncertainty and belief disagreements

Finding Common Ground When Experts Disagree: Robust Portfolio Decision Analysis

Realizing Epistemic Democracy

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