The limit of discounted utilitarianism
Adam Jonsson () and
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Adam Jonsson: Department of Engineering Sciences and Mathematics, Postal: Luleå University of Technology, 97187 Luleå, Sweden
No 748, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics
This paper presents an infinite-horizon version of intergenerational utilitarianism. By studying discounted utilitarianism as the discount factor tends to one, we obtain a new welfare criterion: limit-discounted utilitarianism (LDU). We show that LDU meets standard assumptions of efficiency, equity, and interpersonal comparability, but allows us to compare more pairs of utility streams than commonly-used utilitarian criteria, including the overtaking criterion and the catching-up criterion. We also introduce a principle of compensation for postponements of utility streams and use it to characterize the LDU criterion on a restricted domain.
Keywords: utilitarianism; intergenerational equity; time preference (search for similar items in EconPapers)
JEL-codes: D63 D70 D90 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ger, nep-hpe and nep-upt
Date: 2014-03-17, Revised 2017-02-01
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Journal Article: The limit of discounted utilitarianism (Forthcoming)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:hastef:0748
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