Group threshold when making a decision

M. Gómez Rúa, B. Moreno, E. Molis

We address the problem of making a binary decision under two possible states of the world, where each decision is correct in one of the states. Every agent in a society has preferences regarding the different state-decision pairs, which shape their initial inclination towards one of the decisions before receiving any information about the actual state. This inclination can be formalized as a threshold we refer to as bias. The goal of this paper is to provide micro-foundations for how social bias is formed and how it determines the final collective decision. First, we present a method for aggregating agent biases using Bias Aggregation Rules. Second, we explore an indirect method of aggregation, using a Social Welfare Function that derives a social utility function from individual utility functions over the state-decision pairs. Finally, we examine the conditions under which these two aggregating methods of aggregating agent biases are equivalent and yield the same collective decision.

Palabras clave: Decision Rule, Expected Utility, Social Welfare Function; Consistency

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