Collective choice with heterogeneous time preferences

Mikhail Pakhnin

Journal of Economic Surveys, 2023, vol. 37, issue 3, 715-746

Abstract: This paper reviews recent research on the aggregation of heterogeneous time preferences. Main results are illustrated in a simple Ramsey model with many agents with additively time‐separable utility functions who differ in their discount factors. We employ an intertemporal view on this model and argue that preferences of a decision maker should be represented by a sequence of utility functions. This allows us to clarify the issue of dynamic inconsistency and relate it to simple properties of discounting. We distinguish between private and common consumption cases. In the private consumption case, we discuss the properties of sequences of additively time‐separable social welfare functions (SWFs) and explain why the notion of Pareto optimality under heterogeneous time preferences becomes problematic. In the common consumption case, we focus on the problem of collective choice under heterogeneous time preferences, discuss the difficulties with dynamic voting procedures, and review some ways to overcome them. We conclude by highlighting the implications of our discussion for the problem of choosing an appropriate social discount rate (SDR).

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/joes.12516

Related works:
Working Paper: Collective Choice with Heterogeneous Time Preferences (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jecsur:v:37:y:2023:i:3:p:715-746

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0950-0804

Access Statistics for this article

More articles in Journal of Economic Surveys from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().