Comparing Utility Functions in Efficiency Terms or, What Kind of Utility Functions Do We Want?

TLDR: In this article, the authors consider a hypothetical experiment designed to give meaning to the concept of one "type" of utility function being "preferred" to another, and they find that there is a significant sense in which one set of preferences (and the expected consumption bundle associated with it) can be said to be preferred to another set of preference functions.

Abstract: This note considers a hypothetical experiment designed to give meaning to the concept of one "type" of utility function being "preferred" to another. In the course of presenting the outlines of such a conceptual experiment, the terms type and preferred will be defined. The conclusion-albeit at a quite abstract level-is that while there exists a class of preferences that are indeed non-comparable, as contemporary economic theory holds, there also exists a class of preferences that can be compared with each other. With respect to the latter class we find that there is a significant sense in which one set of preferences (and the expected consumption bundle associated with it) can be said to be preferred to another set of preferences (and the expected consumption bundle associated with it). That being the case, it becomes meaningful to talk about the efficiency or inefficiency of allocating resources to shaping preferences.'