Handling Equitable Preferences
In this talk we are going to consider a problem that social planners face: evaluating a set of distributions (of income, of wealth, of health, of service levels) across a population, in which individuals are considered preferentially indistinguishable. The social planner’s aim could be to choose the “best” distribution in a given set or rank the distributions.
We use a natural dominance relation, generalized Lorenz dominance, drawing on established equity axioms from economic theory. In some settings there may be additional information about preferences (for example, if there is policy statement that one distribution is preferred to another) and any dominance relation should respect such preferences. However, characterising this sort of conditional dominance relation turns out to be computationally challenging. We present theoretical results that help deal with these challenges and present tractable linear programming formulations for testing whether dominance holds between any given pair of distributions. We also propose an interactive decision support procedure for ranking a given set of distributions. We demonstrate the performance of the approach through computational testing.
This is a joint work with Dr. Alec Morton and Dr. Nikos Argyris.
Bio: Özlem Karsu is an Assistant Professor of Industrial Engineering at Bilkent University. She received her B.S and M.S. degrees from the Industrial Engineering Department of the Middle East Technical University, in 2008 and 2010, respectively. She received her PhD degree in Operational Research from the London School of Economics in 2014. Her research interests include inequity-averse decisions, interactive multi-criteria decision making approaches and various applications of multi-objective optimization.
