Social Choice Rules with Responsibility for Individual Skills

Abstract: This paper examines normatively acceptable criteria for evaluating social states when individuals are responsible for their skills or productivity and these factors should be accounted for. We consider social choice rules over sets of feasible utility vectors `a la Nash's (1950) bargaining problem. First, we identify necessary and sufficient conditions for choice rules to be rationalized by welfare orderings or functions over ability-normalized utility vectors. These general results provide a foundation for exploring novel choice rules with the normalization and providing their axiomatic foundations. By adding natural axioms, we propose and axiomatize a new class of choice rules, which can be viewed as combinations of three key principles: distribution according to individuals' abilities, utilitarianism, and egalitarianism. Furthermore, we show that at the axiomatic level, this class of choice rules is closely related to the classical bargaining solution introduced by Kalai and Smorodinsky (1975).