Bayesian Social Aggregation with Accumulating Evidence

36 Pages Posted: 7 Oct 2020 Last revised: 7 Jun 2021

See all articles by Marcus Pivato

Marcus Pivato

THEMA, CY Cergy Paris Université

Date Written: June 6, 2021

Abstract

How should we aggregate the ex ante preferences of Bayesian agents with heterogeneous beliefs? Suppose the state of the world is described by a random process that unfolds over time. Different agents have different beliefs about the probabilistic laws governing this process. As new information is revealed over time by the process, agents update their beliefs and preferences via Bayes rule. Consider a Pareto principle that applies only to preferences which remain stable in the long run under these updates. I show that this “asymptotic” Pareto principle implies that the social planner must be a utilitarian. But it does not impose any relationship between the beliefs of the individuals and those of the planner, except for a weak compatibility condition.

Keywords: subjective expected utility; utilitarian; ex ante Pareto; Markov process; stochastic process

JEL Classification: D70, D81

Suggested Citation

Pivato, Marcus, Bayesian Social Aggregation with Accumulating Evidence (June 6, 2021). Available at SSRN: https://ssrn.com/abstract=3677336 or http://dx.doi.org/10.2139/ssrn.3677336

Marcus Pivato (Contact Author)

THEMA, CY Cergy Paris Université ( email )

33 Boulevard du Port
Cergy-Pontoise Cedex, Cedex 95011
France

HOME PAGE: http://https://sites.google.com/site/marcuspivato/

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