Generalized Utilitarianism and Harsanyi ’ S Impartial Observer Theorem

We provide an axiomatization of generalized utilitarian social welfare functions in the context of Harsanyi’s impartial observer theorem. To do this, we reformulate Harsanyi’s problem such that lotteries over identity (accidents of birth) and lotteries over outcomes (life chances) are independent. We show how to accommodate (…rst) Diamond’s critique concerning fairness and (second) Pattanaik’s critique concerning di¤ering attitudes toward risk. In each case, we show what separates them from Harsanyi by showing what extra axioms return us to Harsanyi. Thus we provide two new axiomatizations of Harsanyi’s utilitarianism.. Keywords: generalized utilitarianism, impartial observer, social welfare function, fairness, ex ante egalitarianism. JEL Classi…cation: D63, D71 Simon Grant Department of Economics Rice University Atsushi Kajii Insitute of Economic Research Kyoto University Ben Polak Department of Economics & School of Management Yale University Zvi Safra Tel Aviv University and College of Management We thank Jurgen Eichberger, Edi Karni, Bart Lipman, Stephen Morris, Heve Moulin, David Pearce, John Quiggin, John Roemer and John Weymark for many helpful comments. Zvi Safra thanks the Israel Science Foundation (grant no. 1299/05) and the Henry Crown Institute of Business Research for their support.