Dynamically consistent intergenerational welfare

Lasse Mononen

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.

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Year of publication:	[2024]
Authors:	Mononen, Lasse
Publisher:	Bielefeld, Germany : Center for Mathematical Economics (IMW), Bielefeld University
Subject:	Dynamic consistency \| discounting \| social discount factor \| preference aggregation \| Soziale Diskontrate \| Social discount rate \| Generationengerechtigkeit \| Intergenerational equity \| Diskontierung \| Discounting \| Soziale Wohlfahrtsfunktion \| Social welfare function \| Intertemporale Entscheidung \| Intertemporal choice \| Overlapping Generations \| Overlapping generations \| Präferenztheorie \| Theory of preferences \| Aggregation