Social discount rate: spaces for agreement

Takashi Hayashi () and Michele Lombardi
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Takashi Hayashi: University of Glasgow

Economic Theory Bulletin, 2021, vol. 9, issue 2, No 7, 247-257

Abstract: Abstract We study the problem of aggregating discounted utility preferences into a social discounted utility preference model. We use an axiom capturing a social responsibility of individuals’ attitudes to time, called consensus Pareto. We show that this axiom can provide consistent foundations for welfare judgments. Moreover, in conjunction with the standard axioms of anonymity and continuity, consensus Pareto can help adjudicate some fundamental issues related to the choice of the social discount rate: the society selects the rate through a generalized median voter scheme.

Keywords: Consensus Pareto; Social aggregation; Discounted utility model; Expected utility theory; Generalized median (search for similar items in EconPapers)
JEL-codes: D71 D72 D91 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s40505-021-00209-9

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