We investigate the notion of the Nash social welfare function and make a fundamental assumption that there exists a distinguished alternative called an origin, which represents one of the worst states for all individuals in the society. Under this assumption, in Sections 1 and 2, we formulate several rationality criteria that a reasonable social welfare function should satisfy. Then we introduce the Nash social welfare function and the Nash social welfare indices which are the images of the welfare function. The function is proved to satisfy the criteria. In Section 3 it is shown that the Nash social welfare function is the unique social welfare function that satisfies the criteria. Then, in Section 4, we examine two examples which display plausibility of the welfare function.
Econometrica publishes original articles in all branches of economics - theoretical and empirical, abstract and applied, providing wide-ranging coverage across the subject area. It promotes studies that aim at the unification of the theoretical-quantitative and the empirical-quantitative approach to economic problems and that are penetrated by constructive and rigorous thinking. It explores a unique range of topics each year - from the frontier of theoretical developments in many new and important areas, to research on current and applied economic problems, to methodologically innovative, theoretical and applied studies in econometrics.
The Econometric Society is an international society for the advancement of economic theory in its relation to statistics and mathematics.
This item is part of a JSTOR Collection.
For terms and use, please refer to our Terms and Conditions
Econometrica
© 1979 The Econometric Society
Request Permissions
