There are public projects which many people welcome because they are expected to be beneficial for society at large. On the other hand, however, these projects may generate larger negative externalities for certain parts of society. One example is the erection of a nuclear power-plant, a measure that is widely considered to render a country’s energy provision less dependent on supply from outside. On the other hand, it possibly causes a feeling of insecurity among people who live in the vicinity (...) of such a power station, and can furthermore have negative economic consequences in so far as the price of land and of houses may decline in this area. How should decisions on public projects with larger negative externalities be taken? Assuming that the benefits for all those who are directly or indirectly affected by such a project are roughly the same, a cost-sharing or burden-sharing method is proposed that focuses on a weighted difference between the economic performance of a particular region and the average performance of all regions concerned. The weight is to be determined by an impartial observer. (shrink)

The concept of utility has played a major role in the history of economic thought, and it is still pivotal in most contemporary economic studies. But what is the meaning of utility? Here we take advantage of the philosophical literature to develop a theoretically robust answer to this question. Based on an analysis of the very diverse philosophical understandings of “meaning”, we introduce a general definition encompassing this diversity. According to this definition, any account of a given act that can (...) be endorsed by the agent performing this act qualifies as a “meaning”. We argue that the concept of utility qualifies as economic meaning. This idea has two aspects. First, at a general level, because the axioms of the theory of choice are, in essence, easily understandable, utility can, in general, be conceived as a meaning. Second, more specifically, this very idea allows to define a standard to adjudicate whether specific instances of utility representation qualify as meanings. The main theoretical implication is that, when a given utility modelling fulfils the requirements to qualify as a meaning, then the stipulation of the axioms of the theory of choice is justified. This implication translates into concrete recommendations for applied economics. (shrink)