Welfare, preferences and the reconstruction of desires

The purpose of this paper is to propose a model that relates the desire for justice with welfare.

The point of departure, elaborated in the first part of the paper, is the observation that we have no sense-organs for experiencing welfare and the experiences of happiness being, in general, transient if they emerge at all. Desires drive our behavior and motivate our decisions. The author will analyze conditions so that desires can be related to welfare, making use of results of social choice theory. There is some (technical) similarity between aggregating individual preferences and editing (“reconstruction”) desires.

In special cases, desires are well ordered and can be represented by preference orderings, ready for deriving “rational choices.” However, desires may be circular. Then, of course, the satisfaction of a particular desire will never trigger happiness because there is always a “higher valued” (or “more prominent”) desire unsatisfied. In these cases, desires and welfare cannot be matched. However, there are social desires, such as the desire for justice (as fairness), that can have welfare-enhancing consequences if satisfied even when private desires are circular, as desires for justice contain a social component.

This issue will be elaborated in the second part of the paper using a formal model, borrowed from Fehr and Schmidt (1999), in order to illustrate the underlying reasoning.