EconPapers    
Economics at your fingertips  
 

On discounting and voting in a simple growth model

Kirill Borissov (), Mikhail Pakhnin () and Clemens Puppe ()

No 77, Working Paper Series in Economics from Karlsruhe Institute of Technology (KIT), Department of Economics and Management

Abstract: In dynamic resource allocation models, the non-existence of voting equilibria is a generic phenomenon due to the multi-dimensionality of the choice space even with agents heterogeneous only in their discount factors. Nevertheless, at each point of time there may exist a "median voter" whose preferred instantaneous consumption rate is supported by a majority of agents. Based on this observation, we propose an institutional setup ("intertemporal majority voting") in a Ramsey-type growth model with common consumption and heterogeneous agents, and show that it provides a microfoundation of the choice of the optimal consumption stream of the median agent. While the corresponding intertemporal consumption stream is in general not a Condorcet winner among all feasible paths, its induced instantaneous consumption rate receives a majority at each point in time in the proposed intertemporal majority voting procedure. We also provide a characterization of balanced-growth and steady-state voting equilibria in the case in which agents may differ not only in their time preference, but also in their instantaneous utility functions.

Keywords: collective choice; common-pool resource; economic growth; heterogeneous agents; median voter theorem (search for similar items in EconPapers)
JEL-codes: D11 D71 D91 O13 O43 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-gro, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/125074/1/84397138X.pdf (application/pdf)

Related works:
Journal Article: On discounting and voting in a simple growth model (2017) Downloads
Journal Article: On discounting and voting in a simple growth model (2017) Downloads
Working Paper: On Discounting and Voting in a Simple Growth Model (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:kitwps:77

Access Statistics for this paper

More papers in Working Paper Series in Economics from Karlsruhe Institute of Technology (KIT), Department of Economics and Management Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2022-01-17
Handle: RePEc:zbw:kitwps:77