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Salience and social choice

Published online by Cambridge University Press:  14 March 2025

Mark Schneider Open the ORCID record for Mark Schneider [Opens in a new window]  and
Jonathan W. Leland Open the ORCID record for Jonathan W. Leland [Opens in a new window]
Mark Schneider*
Affiliation:
University of Alabama, 361 Stadium Drive, 35487 Tuscaloosa, AL, USA
Jonathan W. Leland
Affiliation:
National Science Foundation, 2415 Eisenhower Avenue, 22314 Alexandria, VA, USA
*
[email protected]
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Abstract

The axioms of expected utility and discounted utility theory have been tested extensively. In contrast, the axioms of social welfare functions have only been tested in a few questionnaire studies involving choices between hypothetical income distributions. In a controlled experiment with 100 subjects placed in the role of social planners, we test five fundamental properties of social welfare functions to determine the efficacy of traditional social choice models in predicting social planner allocations when presented with choice sets designed to test the axioms of the theory. We find that three properties of the standard social welfare functions tested are systematically violated, producing an Allais paradox, a common ratio effect, and a framing effect in social choice. We find support for scale invariance and a preference for tail-increasing transfers. Our experiment also enables us to test a model of salience-based social choice which predicts the systematic deviations and highlights the close relationship between these anomalies and the classical paradoxes for risk and time.

Keywords

SalienceSocial choiceAllaisFramingUtilitarianismSocial welfare functions
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 4 , December 2021 , pp. 1215 - 1241
Copyright
Copyright © 2021 Economic Science Association

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Footnotes

Supplementary Information The online version of this article (https://doi.org/10.1007/s10683-020-09695-3) contains supplementary material, which is available to authorized users.

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