Abstract

The weighing up of goods is one aspect of the structure of good. This chapter describes the general problem of weighing goods, and illustrates it with examples. The states of nature are locations of good. Separability says that the value of what happens in one location is independent of what happens in other locations. When the locations are states of nature, the leading theory about how good should be aggregated across them is expected utility theory, and separability is the key assumption of this theory. The chapter gives the examples that show how locations of good are spread across three dimensions: states of nature, people and times. In the most general case, goods are strung out on a three‐dimensional grid of locations. Each location is a person, at a time, in a state of nature.