- List of Figures
- List of Tables
- Notes on Contributors
- Adam Smith and the Study of Ethics in a Commercial Society
- Virtue and Economics, Horse and Cart
- With All Due Respect: A Kantian Approach to Economics
- Ethical Pluralism in Economics
- Economic Ethics and the Capability Approach
- Evolution and Moral Motivation in Economics
- Morality as a Complex Adaptive System: Rethinking Hayek’s Social Ethics
- On the Evolution of Ethics, Rationality, and Economic Behavior
- Human Ethicality: Evidence and Insights from Behavioral Economics
- Ethics <i>and</i> Economics: A Complex Systems Approach
- Economics and Ethics within the Austrian School of Economics
- Feminist Economics and Ethics
- Economy and Culture: The Importance of Sense-Making
- Humane Markets: The Classical Tradition of Political Economy
- Capitalism and Democracy: Allies, Rivals, or Strangers?
- The Moral Status of Profit
- The Ethics of Money and Finance
- Ethics <i>and, in</i>, and <i>for</i> Labor Markets
- Cost-Benefit Analysis and Social Welfare Functions
- The Normative Economics of Social Risk
- The Ethics of Making Risky Decisions for Others
- The Tragedy of Economics: On the Nature of Economic Harm and the Responsibilities of Economists
- Economics, Ethics, and Health Insurance
- Deontological Morality and Economic Analysis of Law
- The Ethics and Economics of Ecological Justice
- Civil Rights, Employment, and Race
- Lessons from Economics
Abstract and Keywords
Social decisions in risky contexts raise a number of difficult questions. Should social decisions be more or less risk averse than the average person? Should we try to avoid large catastrophes more than frequent but limited harms with similar expected impact? Should social decisions be ambiguity-averse or stick to the expected-utility canon? This chapter reviews the normative economics of risk and uncertainty and examines possible answers to these questions, based on the pros and cons of utilitarianism, ex ante egalitarianism, and ex post egalitarianism. The divide between ex ante and ex post approaches reflects a deep trade-off between rationality (embodied in the key properties of the expected utility approach), respect for individual risk attitudes (embodied in the ex ante Pareto principle), and priority for the worse off (or aversion to inequality).
Marc Fleurbaey is an economist, a professor in the Woodrow Wilson School and Center for Human Values at Princeton University, and a member of the Collège d’Etudes Mondiales (Paris FMSH).
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