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Infinite-horizon choice functions

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Author Info

  • Geir Asheim

    ()

  • Walter Bossert

    ()

  • Yves Sprumont

    ()

  • Kotaro Suzumura

    ()

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.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 43 (2010)
Issue (Month): 1 (April)
Pages: 1-21

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Handle: RePEc:spr:joecth:v:43:y:2010:i:1:p:1-21

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Related research

Keywords: Intergenerational resource allocation; Infinite-horizon choice; D63; D71;

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References

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  1. Bossert, Walter & Sprumont, Yves & Suzumura, Kotaro, 2002. "Consistent Rationalizability," Discussion Paper 82, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  2. William Thomson, 2007. "Fair Allocation Rules," RCER Working Papers 539, University of Rochester - Center for Economic Research (RCER).
  3. BOSSERT, Walter & SUZUMURA, Kotaro, 2006. "A Characterization of Consistent Collective Choice Rules," Cahiers de recherche 09-2006, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  4. Mitra, Tapan, 1979. "On the Value Maximizing Property of Infinite Horizon Efficient Programs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(3), pages 635-42, October.
  5. Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
  6. Cass, D & Yaari, M E, 1971. "Present Values Playing the Role of Efficiency Prices in the One-Good Growth Model," Review of Economic Studies, Wiley Blackwell, vol. 38(115), pages 331-39, July.
  7. 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, 09.
  8. Asheim, Geir B. & Tungodden, Bertil, 2005. "A new equity condition for infinite utility streams and the possibility of being Paretian," Memorandum 08/2005, Oslo University, Department of Economics.
  9. Bossert, Walter & Sprumont, Yves & Suzumura, Kotaro, 2007. "Ordering infinite utility streams," Journal of Economic Theory, Elsevier, vol. 135(1), pages 579-589, July.
  10. Asheim, G.B. & Buchholz, W. & Tungodden, B., 1999. "Justifying Sustainability," Papers 5/99, Norwegian School of Economics and Business Administration-.
  11. Chiaki Hara & Tomoichi Shinotsuka & Kotaro Suzumura & Yongsheng Xu, 2008. "Continuity and egalitarianism in the evaluation of infinite utility streams," Social Choice and Welfare, Springer, vol. 31(2), pages 179-191, August.
  12. Asheim, Geir B., 1991. "Unjust intergenerational allocations," Journal of Economic Theory, Elsevier, vol. 54(2), pages 350-371, August.
  13. Basu, Kaushik & Mitra, Tapan, 2003. "Utilitarianism for Infinite Utility Streams: A New Welfare Criterion and Its Axiomatic Characterization," Working Papers 03-05, Cornell University, Center for Analytic Economics.
  14. Geir Asheim & Bertil Tungodden, 2004. "Resolving distributional conflicts between generations," Economic Theory, Springer, vol. 24(1), pages 221-230, 07.
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Cited by:
  1. 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, 07.
  2. José Alcantud, 2009. "Conditional ordering extensions," Economic Theory, Springer, vol. 39(3), pages 495-503, June.
  3. Ram Dubey & Tapan Mitra, 2013. "On the nature of Suppes–Sen maximal paths in an aggregative growth model," Social Choice and Welfare, Springer, vol. 40(1), pages 173-205, January.

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