Robust Aggregation of Preferences
Florian Mudekereza
TL;DR
This paper analyzes how a social planner should aggregate diverse beliefs and tastes when beliefs may be misspecified. It shows that in general, robustness concerns generate impossibility results that push the planner toward dictatorial beliefs unless strong structural assumptions are imposed. By adopting a sequential, structured- Beliefs approach (e.g., intersection of entropy balls) and introducing c-diversity among tastes, the authors derive a tractable multiplier-utility framework that yields a complete aggregation in many settings, including a unique utilitarian social belief under equal-radius Bregman balls. The framework is applied to treatment diversification and dynamic macroeconomics, where the planner can replicate a representative-agent outcome or justify diversification depending on misspecification aversion, with weights that adapt to policy stakes. Overall, the paper formalizes a robust trade-off between policy robustness and belief aggregation, and provides practical, solvable criteria for policy design under model uncertainty.
Abstract
This paper analyzes a society composed of individuals who have diverse sets of beliefs (or models) and diverse tastes (or utility functions). It characterizes the model selection process of a social planner who wishes to aggregate individuals' beliefs and tastes but is concerned that their beliefs are misspecified (or incorrect). A novel impossibility result emerges under several desiderata: a utilitarian social planner who prioritizes robustness to misspecification never aggregates individuals' beliefs but instead behaves as a dictator by adopting one individual's belief as the social belief. This tension between robustness and aggregation exists because aggregation yields policy-contingent beliefs, which are very sensitive to policy outcomes. The impossibility can be resolved, but it would require assuming individuals have heterogeneous tastes and some common beliefs. Applications in treatment choice and dynamic macroeconomics are explored.