Stationary altruism and time consistency

Antoine Billot and Xiangyu Qu

Journal of Economic Theory, 2025, vol. 228, issue C

Abstract: We study social intertemporal preferences constructed through the aggregation of individual preferences that differ in both time discounting and instantaneous utility. We introduce weakened forms of the Pareto condition under which the social discount and instantaneous utility functions are weighted averages of their individual counterparts. We show that if individuals are time-consistent, then society can only preserve this property without falling into dictatorship by applying the condition to comparisons involving only two periods. In such cases, the social discount factor is a weighted average of individual discount factors. When the condition is applied to longer consumption horizons, the resulting social preferences display decreasing impatience. Moreover, the longer the comparison horizon, the stronger the society's preference for patience over time becomes, under mild conditions.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:228:y:2025:i:c:s0022053125000845

DOI: 10.1016/j.jet.2025.106038

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