Characterizing Pareto Optima: Sequential Utilitarian Welfare Maximization (by Yeon-Koo Che, Jinwoo Kim, Fuhito Kojima, Christopher Thomas Ryan)
Yeon-Koo Che, Jinwoo Kim, Fuhito Kojima, Christopher Thomas Ryan
We characterize Pareto optimality via sequential utilitarian welfare maximization: a utility vector u is Pareto optimal if and only if there exists a finite sequence of nonnegative (and eventually positive) welfare weights such that u maximizes utilitarian welfare with each successive welfare weights among the previous set of maximizers. The characterization can be further related to maximization of a piecewise-linear concave social welfare function and sequential bargaining among agents à la generalized Nash bargaining. We provide conditions enabling simpler utilitarian characterizations and a version of the second welfare theorem.