Intergenerational justice when future worlds are uncertain

Humberto Llavador, John Roemer and Joaquim Silvestre

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Let there be a positive (exogenous) probability that, at each date, the human species will disappear. We postulate an Ethical Observer (EO) who maximizes intertemporal welfare under this uncertainty, with expected-utility preferences. Various social welfare criteria entail alternative von Neumann- Morgenstern utility functions for the EO: utilitarian, Rawlsian, and an extension of the latter that corrects for the size of population. Our analysis covers, first, a cake-eating economy (without production), where the utilitarian and Rawlsian recommend the same allocation. Second, a productive economy with education and capital, where it turns out that the recommendations of the two EOs are in general different. But when the utilitarian program diverges, then we prove it is optimal for the extended Rawlsian to ignore the uncertainty concerning the possible disappearance of the human species in the future. We conclude by discussing the implications for intergenerational welfare maximization in the presence of global warming.

Keywords: Discounted utilitarianism; Rawlsian; sustainability; maximin; uncertainty; expected utility; von Neumann-Morgenstern; dynamic welfare maximization. (search for similar items in EconPapers)
JEL-codes: D63 D81 O40 Q54 Q56 (search for similar items in EconPapers)
Date: 2009-10, Revised 2010-06
New Economics Papers: this item is included in nep-ene and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: Intergenerational Justice When Future Worlds are Uncertain (2015)
Journal Article: Intergenerational justice when future worlds are uncertain (2010)
Working Paper: ?Intergenerational justice when future worlds are uncertain? (2009)
Working Paper: Intergenerational Justice when Future Worlds Are Uncertain (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1178

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