4 views

Uploaded by tinchoseoane

© All Rights Reserved

- Doppelt _ Rawls' System of Justice
- ‘Stubborn Attachments’_ Final With Images
- Lecture 1 on Business Ethics
- ABE (SM0381) Assignment Part B - Sample (1) (1) (1)
- Why Do We Punish - Robinson
- Util-File
- Business Ethics Assignment
- Value and Capital - John Hicks
- Companion to Edmund Burke
- To Separate
- Expected Utility Theory Essay
- I. M. D. Little-Ethics, Economics, And Politics_ Some Principles of Public Policy (2002)
- amblogic
- 9 Brandir Intl vs Cascade Pacific
- Economics Project - Kaustubh Singh Thakur - Copy.docx
- Bergson 1973
- 35_Pritam Rana.pdf
- Ch12 - Ethical Theories
- Modeling Project 3
- Econ_Phil_Marques_Weisman

You are on page 1of 7

Source: The Economic Journal, Vol. 85, No. 338 (Jun., 1975), pp. 355-360

Published by: Wiley on behalf of the Royal Economic Society

Stable URL: http://www.jstor.org/stable/2230997

Accessed: 05-07-2015 21:55 UTC

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/

info/about/policies/terms.jsp

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content

in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.

For more information about JSTOR, please contact support@jstor.org.

Wiley and Royal Economic Society are collaborating with JSTOR to digitize, preserve and extend access to The Economic

Journal.

http://www.jstor.org

This content downloaded from 148.206.159.132 on Sun, 05 Jul 2015 21:55:56 UTC

All use subject to JSTOR Terms and Conditions

I

altruistic behaviour have paid scant attention to some fundamental contributions by Edgeworth.2 Consequently, this paper attempts to set out these

propositions and to put minor glosses upon them. It will be convenient to refer

to them, though Edgeworth himself did not, as the shrinkingand non-twisting

theorems.

II

The following are among the relevant passages from MathematicalPsychics:

"between the frozen pole of egoism and the tropical expanse of utilitarianism [there is] ... the position of one for whom in a calm moment his

neighbour's utility compared with his own neither counts for nothing,

nor 'counts for one', but counts for a fraction. We must modify the

utilitarian integral by multiplying each pleasure, except the pleasures of

the agent himself, by a fraction-a factor doubtless diminishing with what

may be called the social distance between the individual agent and those

of whose pleasures he takes account." (Appendix IV, " On Mixed Modes

of Utilitarianism.")

" between the two extremes of Pure Egoistic and Pure Universalistic there

may be an indefinite number of impure methods; wherein the happiness

of others as compared by the agent (in a calm moment) with his own,

neither counts for nothing, nor [misprinted as ' not '] yet ' counts for one',

but countsfor afraction." (P. 16.)

and these passages stand squarely in the tradition of what might be termed

positive utilitarianism;they assert that people do, indeed, attach weights to the

utilities of others. But Edgeworth also asserted, with John Stuart Mill, a

normativeutilitarianismsuch that each would count for one. Thus:

"The whole creation groans and yearns, desiderating a principle of

arbitration, and end of strife." (P. 51.)

" the utilitarian settlement may be selected, in the absence of any other

principle of selection, in virtue of its moral peculiarities: its satisfying the

Sympathy (such as it is) of each with all, the sense ofjustice and utilitarian

equity." (Pp. 53-4.)

The fascinating aspect of Edgeworth's treatment is that these high themes

were integrated into contract and exchange theory at its inception:

1 See, for example, H. Frisch, "Die Contraktkurve bei Interdependenzen im Konsum," Kyklos,

Vol. XXIV (1971), pp. 644-59; L. D. Schall, "Interdependent Utilities and Pareto Optimality,"

QuarterlyJournal of Economics,1972, pp. 19-24; R. H. Scott, "Avarice, Altruism and Second Party

Preferences," QuarterlyJournalof Economics,1972, pp. 1-18.

2 F. Y. Edgeworth, Mathematical

Psychics(1881, L.S.E. Reprint 1934).

355

This content downloaded from 148.206.159.132 on Sun, 05 Jul 2015 21:55:56 UTC

All use subject to JSTOR Terms and Conditions

356

[JUNE

"we might suppose that the object which X (whose own utility is P),

tends-in a calm, effective moment- to maximise, is not P, but P + All;

where A is a coefficientof efective sympathy[Edgeworth's italics]. And similarly Y-not of course while rushing to self-gratification, but in those

regnant moments which characterise an ethical ' method '-may propose

to himself as end 11+ ,tP. What, then, will be the contract curve of these

modified contractors? The old contractcurvebetweennarrowerlimits [Edgeworth's italics] ... As the coefficients of sympathy increase, utilitarianism

becomes more pure, the contractcurvenarrowsdown to the utilitarianpoint."

(P. 53, n. 1.)

x

y~~~'

X

FIG. 1

circles (in which case the contract curve is a straight line):

"The contract curve is easily seen to be the line joining the centres.

Supposing that the distance between the centres is less than the less of the

radii, part of the contract curve is impure.If the index, as Mr. Marshall

might call it, be placed anywhere in this portion it will run up to a centre.

But between the centres the contract curve is pure; the index placed anywhere in this portion is immovable.. ." (P. 25.)

Edgeworth proceeds to a more general algebraic statement:

"it appears that the pure and impure parts of the contract curve are

demarcated by the points where DP/D H changes sign, that is (in general)

where either DP/dor or D I/dc (do being an increment of the length of the

contract curve) either vanishes or becomes infinite. Accordingly the

maximum and minimum of P and rl present demarcating points."

(Pp. 25-6.)

Two propositions may be separated out:

(1) The locus of the contract curve is unaffected by the presence of A and It

(the non-twisting theorem).

(2) The contract curve, or range of core outcomes, shrinks as A and ,t

increase (the shrinking theorem).

This content downloaded from 148.206.159.132 on Sun, 05 Jul 2015 21:55:56 UTC

All use subject to JSTOR Terms and Conditions

1975]

EDGEWORTH'S

PROPOSITIONS

ON ALTRUISM

357

A=

I=

1.

(Edgeworth did not himself make this construction.)1 It is convenient to

change Edgeworth's notation. Hence the two individuals are A and B and the

two goods X and Y. The continuous indifference curves are of the ordinary

" selfish " type while the dotted curves assume specific values of A and ,t between

zero and unity. Given these weights the points a and b represent maximum

utility for A and B respectively. The range of the contract curve between a and

b is pure and the remainder impure.2

III

Is the non-twisting theorem true? It is intuitively clear that non-twisting

has something to do with the assumption that weights are attached to the

utilities of others, not to specific goods in their bundles. That is to say, there is

nothing paternalistic in Edgeworth's benevolence. One is indifferent as to

whether the other's enjoyment (utility given) is worthy or unworthy. But it

turns out that this assumption is a sufficient though not a necessary condition.

In the two-person case goods are allocated either to one person or the other

so that dXBldxA =-1.

Then the general condition for Pareto-optimality with

interdependent utility is

aUA/IXA

aUA/IXB

auXB/IXA

_aUB/XB

aUAIayA-aUAIaYB

aUBIayB-aUBIy(YA

In Edgeworth's case

aUA/IXB = A aUB/IXB

and

aUB/IXA = ,# OUAI/XA

Substituting these, (1) reduces to the familiar condition

auA/axA

auB/axB

aUAIayA

aUBlayB

OUAIOYA

OUBIOYB

(2)

it generalise?

Returning to equation (1) write

auA/axA- auA/axB,

as

SAXauA/axA,

etc.

etc.

I I have benefited from correspondence with WilliamJaffe on this and, indeed, on what he calls

"the mysteries of Edgeworth's idosyncratic modes of mathematical expression".

2

Frisch (op. cit.) similarly distinguishes between the "Kooperations-Kurve" and the "Konflictkurve ".

All use subject to JSTOR Terms and Conditions

358

[JUNE

SAx/SAy = SBxISBy)

condition does not hold the selfish and altruistic loci will differ; the contract

curve will have twisted.2

IV

Edgeworth's propositions (2) and (2 a) will now be considered together.

The first point to notice is that the weights A and It are not adjusted to take

account of relative incomes but, rather, each actor has sufficient sympathy to

perceive the other's increasing marginal utility as his bundle of goods

decreases.

Presumably B's marginal utility becomes very high indeed with small

bundles so that A's point of maximum utility (a) will definitely move to the

south-west as A increases. Under these assumptions the pure contractcurvewill

definitely shrink as both A and ,t increase.

Proposition (2 a) says that a and b will coincide when A = It = 1. It is easy

to show that this is correct. More interestingly they will coincide whenever

A, = 1. That is there will be a perfect consensusnot only when A and B behave

utilitarianly but whenever the one's weak altruism is offset by the strong

altruism of the other.

To show this consider, as did Edgeworth, an index (o) of the contract curve

(O < o < 1) from A's origin. Let the two individuals experience direct

(hedonistic) utilities but also some concern for one another, as follows:

VA=

UA(0)

+AUB(1

(3)

VB = UB(1-O) +tUA(UA

()

duA/d*

-Ad d8B/do-* -

-duB/do* + duB/do-* = 0

(4)

From which3

A#u= 1

(5)

The same result may be achieved rather more simply by considering the

matrix of weights:

1 For a similar treatment in a different context see A. K. Sen, "Labour Allocation in a Cooperative Enterprise," Reviewof EconomicStudies,Vol. XXXIII (4), Oct. 1966, pp. 361-71.

2 In which case Pareto-optimal redistribution can no longer be restricted to general purchasing

power but may require redistribution in kind.

3 SeeJ. de V. Graaff's formula (15) in his appendix to chapter iv of TheoreticalWelfareEconomics

(Cambridge, 1957) for the slope of the utility possibility curve. The careful reader will notice, by the

way, that the formula is slightly misprinted. With perfect consensus there will be no downward

sloping portion of the utility possibility curve. If one inserts Edgeworth's notation into de Graaff's

formula one obtains, for consensus, (1 -AA) (au lax) = 0. That is, either AAt= 1 or "satiation".

All use subject to JSTOR Terms and Conditions

1975]

EDGEWORTH'S PROPOSITIONS

To

By A

y B

ON ALTRUISM

359

A

1

B

A

A and B may be said to use identical social weights whenever one row is simply

a multiple of the other.1 As we have constrained the diagonal weights to unity

the condition Alt = 1 follows immediately.

x

x

FIG. 2

way.

(2 a') For any consensus (o *) there exists a set of supporting weights A*, It *

where A*u * = 1. The special utilitarian consensus (C) is supported

by A = It = 1. The dual to this theorem is that for any set of supporting weights A* Iu*, where A*,u* = 1 there exists a consensus

( *)

Such consensus points would be reached only by a remarkable fluke. But

as long as A, It = 0 there will be a consensus range (the pure contract curve).

Redistribution from points outside the range will make bothparties better off,

i.e. there will be scope for so-called " Pareto-optimal " redistribution. But there

will be no guarantee, of course, that actual weights will be such as to support

any prescribed consensus range.

VI

In the last section it was suggested that Edgeworth's proposition (2 a) may

be taken as a special case of a consensustheorem.Edgeworth did not go on to

consider what would happen should A and B be "excessively" altruistic

(A,j > 1). Point a would then lie to the south-west of point b. Apparently each

1 The two social welfare functions are then essentially identical. I am grateful to Stan Katz and

Maurice McManus for discussion on this and the more general n person case.

All use subject to JSTOR Terms and Conditions

360

[JUNE 1975]

would reach an optimal bundle before the total was exhausted. Hence the

economic problem has disappeared. I am tempted to call this the vanishing

theorem.1But the situation should not be confused with satiety proper as it

remains the case that each would truly like more goods were it not for the fact

that he would thereby deprive the other. It would be open to them to cleave

the knot by accepting some arbitrary rule to allocate whatever is " left-over ".*2

In terms of the diagram the range a-b is still the pure contract curve (points

on it are better than points off it) and allocations to the south-west of a or

north-east of b will not be sustained. However, the situation is the reverse of

the usual one in that each would prefer the otherto have more.

VII

Summaryand Conclusions

I have suggested that two theorems, the " non-twisting " and " shrinking"

theorems, are to be found in Edgeworth's analysis of altruism and are correct

on his assumptions. Additionally his remarks about the "utilitarian point"

may be generalised into a " consensus " theorem and into a " vanishing"

theorem when altruism is excessive.

DAVID COLLARD

University of Bristol.

Date of receiptoffinal typescript: October1974.

1 It is as thoughboth parties were sated. Thus David Hume in a brilliant passage: " [the poets]

easily perceived, if every man had a tender regard to another, or if nature supplied abundantly all

our needs and desires, that the jealousy of interest, which justice supposes, could no longer have

place ... encreaseto a sufficientdegreethe benevolence

of men, or the bountyof nature,and you renderjustice

useless" (Treatise (my italics)).

2 Another possibility, as a referee has pointed out, is that the parties revise their expectations

about scarcity. Each would perceive that dxildxj was zero, not - 1, and points like "a" would be

adjusted upwards until the resource constraint again became tight.

All use subject to JSTOR Terms and Conditions

- Doppelt _ Rawls' System of JusticeUploaded byRicardo Crissiuma
- ‘Stubborn Attachments’_ Final With ImagesUploaded byAnneMarie
- Lecture 1 on Business EthicsUploaded bySheryl Renomeron Morales
- ABE (SM0381) Assignment Part B - Sample (1) (1) (1)Uploaded bysummer
- Why Do We Punish - RobinsonUploaded byhughbob
- Util-FileUploaded byElias Garcia
- Business Ethics AssignmentUploaded byAshvind Dookhee
- Value and Capital - John HicksUploaded bymikemelo
- Companion to Edmund BurkeUploaded bydlakovuk4253
- To SeparateUploaded byapi-3852456
- Expected Utility Theory EssayUploaded byKand Hroppa
- I. M. D. Little-Ethics, Economics, And Politics_ Some Principles of Public Policy (2002)Uploaded byivan1917
- amblogicUploaded byKhristian Daniel Chaves
- 9 Brandir Intl vs Cascade PacificUploaded byJoy Navaja Dominguez
- Economics Project - Kaustubh Singh Thakur - Copy.docxUploaded byKaustubh Singh
- Bergson 1973Uploaded byAngel Guillen
- 35_Pritam Rana.pdfUploaded byKunal Kaushal
- Ch12 - Ethical TheoriesUploaded byGrigoras Alexandru Nicolae
- Modeling Project 3Uploaded byaznbillionaire34
- Econ_Phil_Marques_WeismanUploaded byKairos_2008
- 10 OD Decision Analysis hUploaded bykvss1992
- Transportation ArticleUploaded byAlfa Alex
- An Economic Model of Planning FallacyUploaded byRichard Nockolds
- 18. Making Decisions Based on Multiple CriteriaUploaded byawesomeprussia
- 01027Uploaded byTrix
- Report in LawUploaded byJerico Estabillo
- Review of LiteratureUploaded byRoberto Charles
- 1909727Uploaded bydyingmoonlight
- MIT14_03F16_lec4Uploaded byYe Tun
- PPT_HHDemandUploaded byrogvil

- Concepts of CompetitionUploaded byFranklinBarrientosRamirez
- HISTORY OF PERFECT COMPETITIONUploaded bySafia Aslam
- Marcel Mauss The Gift the Form and Reason for Exchange in Archaic Societies (Routledge Classics) -Routledge (2002)Uploaded bytinchoseoane
- GameTheory_HistoricalIntro.pdfUploaded bySadyk Umurzakov
- Cournot by EdgeworthUploaded byinkind1982
- Stigler, George J. -- Perfect Competition, Historically ContemplatedUploaded byXiomySosa
- Hotelling Stability in Competition EJ 1929Uploaded byPriyansh Agrawal