THE HOMELESS OBSERVER: JOHN HARSANYI ON INTERPERSONAL UTILITY COMPARISONS AND BARGAINING, 1950–1964

This paper traces interpersonal utility comparisons and bargaining in the work of John Harsanyi from the 1950s to the mid-1960s. As his preoccupation with how theorists can obtain information about agents moved from an approach centered on empathetic understanding to the more distanced perspective associated with game theory, Harsanyi shifted emphasis from the social scientist’s lack of information vis-à-vis agents to agents’ lack of information about each other. In the process, he provided economists with an analytical framework they could use to study problems related to the distribution of information among agents while consolidating the perspective of a distant observer whose knowledge can replace that of real people.