Collective Intertemporal Choice: the Possibility of Time Consistency

Antony Millner and Geoffrey Heal

No 22524, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent work on collective intertemporal choice suggests that non-dictatorial social preferences are generically time inconsistent. We argue that this claim conflates time consistency with two distinct properties of preferences: stationarity and time invariance. While the conjunction of time invariance and stationarity implies time consistency, the converse does not hold. Although social preferences cannot be stationary, they may be time consistent if time invariance is abandoned. If individuals are discounted utilitarians, revealed preference provides no guidance on whether social preferences should be time consistent or time invariant. Nevertheless, we argue that time invariant social preferences are often normatively and descriptively problematic.

JEL-codes: D60 D71 D90 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-mic and nep-upt
Note: EEE PE POL
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