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Dynamically Consistent Intergenerational Welfare

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  • Mononen, Lasse

    (Center for Mathematical Economics, Bielefeld University)

Abstract

Dynamic consistency is crucial for credible evaluation of intergenerational choice plans that inherently lack commitment. We offer a general characterization for dynamically consistent intergenerational welfare aggregation. The aggregation is characterized by envy-guilt asymmetry in discounting with respect to future generations’ utility: Higher utility than future generations’ utility is discounted differently than lower utility than future generations’ utility. This offers a simple and tractable characterization for the dynamically consistent choice rules.

Suggested Citation

  • Mononen, Lasse, 2024. "Dynamically Consistent Intergenerational Welfare," Center for Mathematical Economics Working Papers 687, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:687
    as

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    File URL: https://pub.uni-bielefeld.de/download/2987284/2987285
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    References listed on IDEAS

    as
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    Keywords

    Dynamic consistency; discounting; social discount factor; preference aggregation;
    All these keywords.

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