a1 London School of Economics and Political Science, UK [email protected]
a2 Princeton University, USA [email protected]
We consider a special set of risky prospects in which the outcomes are either life or death (or, more generally, binary utilities). There are various alternatives to the utilitarian objective of minimizing the expected loss of lives in such prospects. We start off with the two-person case with independent risks and construct taxonomies of ex ante and ex post evaluations for such prospects. We examine the relationship between the ex ante and the ex post in this restrictive framework: There are more possibilities to respect ex ante and ex post objectives simultaneously than in the general framework, i.e. without the restriction to binary utilities (cf. Harsanyi's aggregation theorem). We extend our results to n persons and to dependent risks. We study optimal strategies for allocating risk reductions given different objectives. We place our results against the backdrop of various pro-poorly off (or prioritarian) value functions (Diamond 1967; Rabinowicz 2002; Fleurbaey 2010) for the evaluation of risky prospects.
(Online publication August 29 2012)
Luc Bovens is Professor at the London School of Economics and Political Science in the Department of Philosophy, Logic and Scientific Method. His research interests are in philosophy of public policy, moral psychology, Bayesian epistemology, and rational and social choice theory.
Marc Fleurbaey is Laurance S. Rockefeller Professor of Public Affairs and the Center for Human Values at Princeton University. His recent books include Fairness, Responsibility, and Welfare (Oxford University Press, 2008) and A Theory of Fairness and Social Welfare (Cambridge University Press, 2011, co-authored with F. Maniquet). His research bears primarily on normative economics and public economics.
We are grateful to comments from Wlodek Rabinowicz, Martin van Hees and Alex Voorhoeve. Luc Bovens is grateful for the support of the Swedish Collegium for Advanced Studies (SCAS) in Uppsala, Sweden, the Grantham Research Institute on Climate and the Environment and the Centre for Climate Change Economics and Policy, which is funded by the Economic and Social Research Council, and the Dutch Organisation for Scientific Research (NWO – project nr. 236-20-005).