Question

What is meant by a "social welfare function"?

   What is meant by a "social welfare function"?

Intermediate Microeconomics

Intermediate Microeconomics

Robert W. Clower,… 1st Edition

Chapter 20, Problem 17

Instant Answer

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A social welfare function is a mathematical function that aggregates individual preferences, utilities, or welfare to determine the overall welfare or social preference of a society. It aims to represent the collective well-being of a community based on the Show more…

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Key Concepts

Social Welfare Function

A social welfare function is a theoretical construct in economics and social choice theory that aggregates individual utilities, preferences, or well-being into a single measure of societal welfare. It is used to evaluate and compare different distributions of welfare across a society, often incorporating both efficiency and equity considerations.

Welfare Economics

Welfare economics is the branch of economics that assesses economic policies and systems based on their impact on overall social welfare. It provides the framework within which tools like the social welfare function are applied to determine optimal resource allocation, focusing on both the distribution of benefits and overall efficiency.

Social Choice Theory

Social choice theory examines the methods and principles for aggregating individual preferences into collective decisions. The theory underpins the use of social welfare functions by exploring how diverse individual utilities can be combined to reflect a society’s overall welfare, and it highlights the challenges and trade-offs inherent in collective decision-making.

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