Infinite-horizon choice functions

Geir B. Asheim (), Walter Bossert (), Yves Sprumont () and Kotaro Suzumura ()
Additional contact information
Yves Sprumont: D´epartement de Sciences Economiques and CIREQ, Universit´e de Montr´eal, Postal: C.P. 6128, succursale Centre-ville, Montr´eal QC H3C 3J7, Canada, http://www.cireq.umontreal.ca/personnel/sprumont.html

No 17/2006, Memorandum from Oslo University, Department of Economics

Abstract: We analyze infinite-horizon choice functions within the setting of a simple linear technology. Time consistency and efficiency are characterized by stationary consumption and inheritance functions, as well as a transversality condition. In addition, we consider the equity axioms Suppes-Sen, Pigou-Dalton, and resource monotonicity. We show that Suppes-Sen and Pigou-Dalton imply that the consumption and inheritance functions are monotone with respect to time—thus justifying sustainability—while resource monotonicity implies that the consumption and inheritance functions are monotone with respect to the resource. Examples illustrate the characterization results.

Keywords: Intergenerational resource allocation; infinite-horizon choice (search for similar items in EconPapers)
JEL-codes: D63 D71 (search for similar items in EconPapers)
Date: 2006-05-15
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Related works:
Working Paper: Infinite-horizon choice functions (2008)
Working Paper: Infinite-Horizon Choice Functions (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:osloec:2006_017

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