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A cardinal social welfare function is a function that takes as input numeric representations of individual utilities (also known as cardinal utility), and returns as output a numeric representation of the collective welfare. The underlying assumption is that individuals utilities can be put on a common scale and compared.
An additive agent has a utility function that is an additive set function: for every additive agent i and item j, there is a value ,, such that () =, for every set Z of items. When all agents are additive, welfare maximization can be done by a simple polynomial-time algorithm: give each item j to an agent for whom v i , j {\displaystyle v_{i,j ...
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. A typical methodology begins with the derivation (or assumption) of a social welfare function, which can then be used to rank economically feasible allocations of resources in terms of the social welfare they entail.
Welfare economics is a field of economics that applies microeconomic techniques to evaluate the overall well-being (welfare) of a society. [1]The principles of welfare economics are often used to inform public economics, which focuses on the ways in which government intervention can improve social welfare.
Social choice theory is a branch of welfare economics that extends the theory of rational choice to collective decision-making. [1] Social choice studies the behavior of different mathematical procedures ( social welfare functions ) used to combine individual preferences into a coherent whole.
There are two fundamental theorems of welfare economics. The first states that in economic equilibrium , a set of complete markets , with complete information , and in perfect competition , will be Pareto optimal (in the sense that no further exchange would make one person better off without making another worse off).
In social choice theory, unrestricted domain, or universality, is a property of social welfare functions in which all preferences of all voters (but no other considerations) are allowed. Intuitively, unrestricted domain is a common requirement for social choice functions, and is a condition for Arrow's impossibility theorem.
The set of conditions across different possible votes refined welfare economics and differentiated Arrow's constitution from the pre-Arrow social welfare function. In so doing, it also ruled out any one consistent social ordering to which an agent or official might appeal in trying to implement social welfare through the votes of other s under ...