Dynamically Consistent Intergenerational Welfare

Lasse Mononen
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Lasse Mononen: Center for Mathematical Economics, Bielefeld University

No 687, Center for Mathematical Economics Working Papers from Center for Mathematical Economics, Bielefeld University

Abstract: Dynamic consistency is crucial for credible evaluation of intergenerational choice plans that inherently lack commitment. We offer a general characterization for dynamically consistent intergenerational welfare aggregation. The aggregation is characterized by envy-guilt asymmetry in discounting with respect to future generations’ utility: Higher utility than future generations’ utility is discounted differently than lower utility than future generations’ utility. This offers a simple and tractable characterization for the dynamically consistent choice rules.

Keywords: Dynamic consistency; discounting; social discount factor; preference aggregation (search for similar items in EconPapers)
Pages: 11
Date: 2024-02-21
New Economics Papers: this item is included in nep-dcm, nep-mic and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:bie:wpaper:687

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