Institutions in Context: Inequality
University of Tampere, 3-9 June 2013
On Equality, Social Choice Theory, and
Normative Economics
Maurice Salles
Université de Caen
CPNSS, LSE
Murat Sertel Center, Bilgi University, Istanbul
On Equality, Social Choice Theory, and Normative Economics
1. Equality in equilibrium theory
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1.1. Exchange economies
1.2. Economies with production
2. Equality in social choice theory, political science …
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2.1. Individuals
2.1.1. Anonymity
2.1.2. Power
2.2. Alternatives (neutrality)
On Equality, Social Choice Theory, and Normative Economics
3. Equality in normative economics/social ethics
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3.1. Resources
3.2. Opportunities
3.3. Welfare
3.4. Capabilities
4. Equality and the incidence of formal methods
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4.1. Measure theory
4.2. Commodity spacers
On Equality, Social Choice Theory, and Normative Economics
• What is Equality? Equality of What? (Amartya Sen, Tanner
Lectures 1979)
• Equality/Inequality
Robert Badinter
Amartya Sen
On Equality, Social Choice Theory, and Normative Economics
• Equality in microeconomic theory (general equilibrium theory:
initial endowments, preferences, shares of profits)
Lionel McKenzie
Lionel McKenzie
Gérard Debreu
Gérard Debreu
Kenneth Arrow
Robert Aumann
Kenneth Arrow
Robert Aumann
On Equality, Social Choice Theory, and Normative Economics
• Equality in social choice theory, political science: individuals
(power, influence, anonymity), alternatives/social
states/candidates (neutrality)
Lloyd Shapley Martin Shubik John Banzhaf III Lionel Penrose
On Equality, Social Choice Theory, and Normative Economics
• Equality in normative economics, social ethics: incomes,
opportunities, well-beings
• Philosophers
John Rawls
Ronald Dworkin
G. A. Cohen
On Equality, Social Choice Theory, and Normative Economics
• Economists
John Harsanyi
Serge Kolm
John Roemer
On Equality, Social Choice Theory, and Normative Economics
• and
Marc Fleurbaey
François Maniquet
On Equality, Social Choice Theory, and Normative Economics
1.
Equality in equilibrium theory
1.1. Exchange economies
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commodities.
commodity space
individuals (consumers)
Parameters :
i
preferences of individual i
ei initial endowments of individual i
price vector
+)
On Equality, Social Choice Theory, and Normative Economics
On Equality, Social Choice Theory, and Normative Economics
On Equality, Social Choice Theory, and Normative Economics
On Equality, Social Choice Theory, and Normative Economics
1.2. Economies with production
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Consumers as share holders
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m production units
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ij
share of consumer i in production unit j
wealth of consumer i pei
ij
1/n
j
ij py
j
On Equality, Social Choice Theory, and Normative Economics
2. Equality in social choice theory, political science
2.1. Individuals
2.1.1 Anonymity
Anonymity highlighted by Donald Saari in his 2008 book (when he considers
conditions to be selected)
• Majority rule
• Borda rule and other voting rules (Dummett, Saari)
• But Arrovian framework
• Non-dictatorship
• No veto
• Extensions (Bordes and Salles, Duggan)
On Equality, Social Choice Theory, and Normative Economics
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2.1.2 Power
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Equal power
Political institutions (EU, UN…)
Power measures
A priori (treaties, constitutions …)
In practice (bargaining …)
Representative democracy (fair representation, proportional rule …)
Influence
Equal power or no power
On Equality, Social Choice Theory, and Normative Economics
2.2. Alternatives: Neutrality
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Voting rules (among the four conditions selected by Donald Saari)
Constitutions
Ties
Power and neutrality in the Arrovian framework (with independence of irrelevant
alternatives)
Power, neutrality, welfarism: Sen’s impossibility theorem
Individual rights
On Equality, Social Choice Theory, and Normative Economics
3. Equality in normative economics/social ethics
3.1. Resources
• Primary goods (Rawls)
• Resources à la Dworkin
• Incomes (resources as generally considered in economics)
• Basic incomes (Van Parijs)
• ELIE: Equal-Labor Income Equalisation (Kolm)
Equalisation labor is k
yi = wi i ti
ti
wi )
On Equality, Social Choice Theory, and Normative Economics
3.2. Opportunities (Roemer)
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Discrimination
Handicap
Skills (Fleurbaey, Maniquet)
3.3. Welfare (Dworkin and others)
3.4. Capabilities (Sen)
On Equality, Social Choice Theory, and Normative Economics
4. Equality and the incidence of formal methods
4.1. Measure theory
4.2 Commodity spaces