Interpersonal comparison of utility by measuring neural activity

AbstractAggregating well-being across individuals to reach collective decisions is one of the most fundamental problems in our society. Interpersonal comparisons of utility are pivotal and inevitable for well-being aggregation, because if utility is not interpersonally comparable, there is no rational aggregation procedure that simultaneously satisfies even mild conditions for validity (Arrow’s impossibility theorem); however, there are as yet no scientific methods for interpersonal comparison of utility. In this study, we developed a method based on brain signals. We found that the anterior cingulate and its adjacent ventromedial prefrontal activity is correlated with changes in expected utility. The ratio of lower- and higher-income participants’ neural signals coincided with estimates of their psychological pleasure by “impartial spectators.” We confirmed the validity of our interpersonal utility comparison method using an independent large-scale dataset and used the aggregated well-being from our experimental data to derive an optimal decision rule. These findings suggest that our interpersonal comparison method enables scientifically reasonable well-being aggregation by escaping Arrow’s impossibility and has implications for the fair distribution of economic goods. Our method can be used for evidence-based policy-making in nations that use cost-benefit analyses or optimal taxation theory for policy evaluation.