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The limit of discounted utilitarianism

Adam Jonsson () and Mark Voorneveld
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Adam Jonsson: Department of Engineering Sciences and Mathematics, Luleå University of Technology

Theoretical Economics, 2018, vol. 13, issue 1

Abstract: This paper presents an infinite-horizon version of intergenerational utilitarianism. By studying discounted utilitarianism as the discount factor tends to one, we obtain a new welfare criterion: limit-discounted utilitarianism (LDU). We show that LDU meets standard assumptions of efficiency, equity, and interpersonal comparability, but allows us to compare more pairs of utility streams than commonly-used utilitarian criteria, including the overtaking criterion and the catching-up criterion. We also introduce a principle of compensation for postponements of utility streams and use it to characterize the LDU criterion on a restricted domain.

Keywords: Utilitarianism; intergenerational equity; time preference (search for similar items in EconPapers)
JEL-codes: D63 D70 D90 (search for similar items in EconPapers)
Date: 2018-01-31
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