Economic Theory - Georgios Gerasimou (University of Glasgow)

Title: Intensity-efficient allocations

Abstract: We propose a refinement of Pareto efficiency for situations where, in addition to having ordinal preferences, agents also have ordinal intensities: they can make simple comparisons such as “I prefer A to B more than I prefer C to D” without necessarily being able to quantify them. We put forward a rank-based criterion for this new analytical environment that allows for intuitive interpersonal comparisons of intensities rather than interpersonal comparisons of utilities. Building on this criterion, we define an allocation to be intensity-efficient if it is Pareto efficient and also such that, when another allocation assigns the same pairs of items to the same pairs of agents but in a “flipped” way, the former allocation assigns the commonly preferred item in every such pair to the agent who prefers it more. We study the existence properties of this efficiency refinement and its relation to ordinal utilitarian aggregation.