Raphaële Chappe

Ph.D. Student
The New School For Social Research

Raphaële Chappe is currently pursuing her PhD in Economics at The New School for Social Research. Her current research interests include finance and risk management, law and economics, as well as the political, economic and social implications of the evolution of the financial sector in the aftermath of the financial crisis. She is currently a member of The Cultures of Finance Working Group at the Institute For Public Knowledge (NYU).

Prior to that, she practiced as an attorney for eight years in the financial services industry. In her last position, she worked as a VP with Goldman Sachs in the Tax Department. She holds a Master of Laws (LLM) in International Tax from New York University (School of Law), a Maitrise and Master’s degree in Comparative Business Law from the University of Pantheon-Sorbonne in Paris, France, and an LL.B from King’s College London.

My Content

Given the choice, would you accept to live in a society where happiness and prosperity is guaranteed for all on the condition that one single person be kept permanently unhappy?  Is the well-being of thousands of people “worth” the sacrifice and suffering of a single innocent child?  Such is the dilemma to which the inhabitants of the utopian city of Omelas are confronted in Ursula Le Guin’s philosophical short-story “The Ones Who Walk Away from Omelas”.  In her parable, most people are ultimately able to come to terms with the atrocity.

Axiomatic bargaining is presented in MWG in the context of welfare economics (Ch. 22), the aim being the formulation of reasonable criteria for dividing gains resulting from cooperative endeavors (the “joint surplus”). It is further presented as an application of cooperative game theory, in which an arbitrator distributes the joint surplus in a manner that reflects “fairly” the bargaining strength of the different agents (although we could conceive of a situation where the parties are bargaining without an external party). If bargaining fails, the outcome is the parties’ own fallback positions (the threat point, or status quo).

The Risk Society

Recent social theory dealing with modernity has focused on the increase of new forms of risk as a social challenge. The growing relative importance of manufactured risks (that are the product of human activity) as compared to external or natural risks is well described in the work of the sociologists Ulrich Beck (Beck, 1992) or Anthony Giddens (Giddens, 1990).[1] The emergence of new forms of manufactured risk (e.g. environmental risk, financial risk) is a direct consequence of rising levels of complexity and interconnectedness in industrial societies, reflected in the organization of production, the nature of the technologies employed, etc.

For nineteenthth century figures such as Bentham and Jevons, the concept of utility was associated with satisfaction or pleasure experienced. However, initially utility was defined as a property of an object -- its usefulness and capacity to procure such pleasure. For Bentham, utility was “that property of any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness”. Subsequently utility came to be understood as a feature of persons rather than objects: “the sum of pleasure and pain prevented” (Jevons, 1871).


MWG introduces the theory of consumer behavior by presenting two distinct approaches to modeling consumer behavior, the preference-based approach (based upon unobservable preferences generating a utility function) and the choice-based approach (based upon observable choice behavior), and attempting to establish connections between the two.