CPO-2002 Lecture Notes - Lecture 11: Pareto Efficiency, Utility, Pairwise Comparison
Document Summary
Chapter 11 notes: problems with group decision making. -one common aspect of democracy is majority rule. ~common sense notion: the thing that most people want. ~different majorities in different places: examine maps from local, state, & national elections. ~ca(cid:374)didate (cid:449)ith the (cid:373)ost (cid:448)otes still a(cid:272)ts o(cid:374) e(cid:448)er(cid:455)o(cid:374)e"s (cid:271)ehal(cid:448)es. ~we assume that all individuals are rational (complete and transitive) ~complete preference orderings: she prefers x to y, she prefers y to x, or she is indifferent. ~transitive preference orderings: if x is preferred to y, and y is preferred to z, then x must be preferred to z. *example) liberal larry, centrist clyde, conservative connie (slide 13) all have complete and transitive orderings. ~pairwise comparison: compare two options at once to see which is preferred by the majority. *example) liberal larry, centrist clyde, conservative connie (slides 16-21) ~condorcet winner: option that beats all other options in pairwise comparisons. *maintaining current spending is the condorcet winner in this examples.
