The Utilitarian Relevance of the Aggregation Theorem


American Economic Journal: Microeconomics

August 2016, vol. 8, n°3, pp.289-306

Departments: Economics & Decision Sciences, GREGHEC (CNRS)

Keywords: Utilitarianism, Aggregation Theorem, Impartial Observer Theorem, Cardinal utility, VNM utility, Harsanyi, Sen

Harsanyi (1955) invested his Aggregation Theorem and Impartial Observer Theorem with utilitarian sense, but Sen (1986) described them as "representation theorems" with little ethical import. This critical view has never been subjected to full analytical scrutiny. The formal argument we provide here supports the utilitarian relevance of the Aggregation Theorem. Following a hint made by Sen himself, we posit an exogeneous utilitarian ordering that evaluates riskless options by the sum of individual utilities, and we show that any social observer who obeys the conditions of the Aggregation Theorem evaluates social states in terms of a weighted variant of this utilitarian sum.