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Infinite-horizon choice functions

Author

Listed:
  • Asheim, Geir B.

    (Dept. of Economics, University of Oslo)

  • Bossert, Walter

    (D´epartement de Sciences Economiques and CIREQ, Universit´e de Montr´eal)

  • Sprumont, Yves

    (D´epartement de Sciences Economiques and CIREQ, Universit´e de Montr´eal)

  • Suzumura, Kotaro

    (Institute of Economic Research, Hitotsubashi University)

Abstract

We analyze infinite-horizon choice functions within the setting of a simple linear technology. Time consistency and efficiency are characterized by stationary consumption and inheritance functions, as well as a transversality condition. In addition, we consider the equity axioms Suppes-Sen, Pigou-Dalton, and resource monotonicity. We show that Suppes-Sen and Pigou-Dalton imply that the consumption and inheritance functions are monotone with respect to time—thus justifying sustainability—while resource monotonicity implies that the consumption and inheritance functions are monotone with respect to the resource. Examples illustrate the characterization results.

Suggested Citation

  • Asheim, Geir B. & Bossert, Walter & Sprumont, Yves & Suzumura, Kotaro, 2006. "Infinite-horizon choice functions," Memorandum 17/2006, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2006_017
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    References listed on IDEAS

    as
    1. Kaushik Basu & Tapan Mitra, 2003. "Aggregating Infinite Utility Streams with InterGenerational Equity: The Impossibility of Being Paretian," Econometrica, Econometric Society, vol. 71(5), pages 1557-1563, September.
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    Cited by:

    1. Bazhanov, Andrei V., 2022. "Extraction path and sustainability," Resources Policy, Elsevier, vol. 76(C).
    2. Tanguy Isaac & Paolo Piacquadio, 2015. "Equity and efficiency in an overlapping generation model," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 549-565, March.
    3. M. Ali Khan & Metin Uyanık, 2021. "Topological connectedness and behavioral assumptions on preferences: a two-way relationship," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(2), pages 411-460, March.
    4. Castellano, Rosella & Cerqueti, Roy & Spinesi, Luca, 2016. "Sustainable management of fossil fuels: A dynamic stochastic optimization approach with jump-diffusion," European Journal of Operational Research, Elsevier, vol. 255(1), pages 288-297.
    5. José Alcantud, 2009. "Conditional ordering extensions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(3), pages 495-503, June.
    6. José Carlos R. Alcantud & María D. García-Sanz, 2013. "Evaluations of Infinite Utility Streams: Pareto Efficient and Egalitarian Axiomatics," Metroeconomica, Wiley Blackwell, vol. 64(3), pages 432-447, July.
    7. Piacquadio, Paolo G., 2020. "The ethics of intergenerational risk," Journal of Economic Theory, Elsevier, vol. 186(C).
    8. Piacquadio, Paolo G., 2014. "Intergenerational egalitarianism," Journal of Economic Theory, Elsevier, vol. 153(C), pages 117-127.
    9. Ram Dubey & Tapan Mitra, 2013. "On the nature of Suppes–Sen maximal paths in an aggregative growth model," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(1), pages 173-205, January.

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    More about this item

    Keywords

    Intergenerational resource allocation; infinite-horizon choice;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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