Endogenous Inequality Aversion: Decision criteria for triage and other ethical tradeoffs

TL;DR

This paper introduces social welfare functions that adapt inequality aversion based on overall welfare, formalizing triage guidelines and ethical tradeoffs in resource allocation.

Contribution

It provides an axiomatic foundation for welfare functions that shift between Rawlsian and utilitarian criteria depending on welfare levels.

Findings

Welfare-dependent inequality aversion formalized mathematically.

Functions interpolate between Rawlsian and utilitarian principles.

The model captures triage decision-making in emergencies.

Abstract

Medical "Crisis Standards of Care" call for a utilitarian allocation of scarce resources in emergencies, while favoring the worst-off under normal conditions. Inspired by such triage rules, we introduce social welfare functions whose distributive tradeoffs depend on the prevailing level of aggregate welfare. These functions are inherently self-referential: they take the welfare level as an input, even though that level is itself determined by the function. In our formulation, inequality aversion varies with welfare and is therefore self-referential. We provide an axiomatic foundation for a family of social welfare functions that move from Rawlsian to utilitarian criteria as overall welfare falls, thereby formalizing triage guidelines. We also derive the converse case, in which the social objective shifts from Rawlsianism toward utilitarianism as welfare increases.