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Planning for the long run: Programming with patient, Pareto responsive preferences

Urmee Khan and Maxwell B. Stinchcombe

Journal of Economic Theory, 2018, vol. 176, issue C, 444-478

Abstract: Respect for first order distributional overtaking guarantees that social welfare functions for intergenerational problems treat present and future people equally and respect the Pareto criterion, modulo null sets. For weakly ergodic optimization problems, this class of social welfare functions yields solutions that respect welfare concerns, sharply contrasting with extant patient criteria. For problems in which the evolution of future paths hinges on early events and decisions, the curvature of our social welfare functions determines the risks that society is willing to undertake and leads to a variant of the precautionary principle.

Keywords: Intergenerational equity; Pareto responsiveness; Long-run optimality in stochastic dynamic problems (search for similar items in EconPapers)
JEL-codes: C6 D6 D8 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:jetheo:v:176:y:2018:i:c:p:444-478