Econometrica: Mar 1980, Volume 48, Issue 2
Aggregate Expected Consumer Surplus as a Welfare Index with an Application to Price Stabilization
William P. RogersonThis paper presents necessary and sufficient conditions for the expected value of consumer surplus to correctly represent a consumer's preferences. A theorem characterizing utility functions which represent preferences over conditional probabilities is used to derive this. An application to price stabilization policy is presented.
Log In To View Full Content