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A Theory of Intergenerational Altruism

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  • Simone Galperti
  • Bruno Strulovici

Abstract

Modeling intergenerational altruism is crucial to evaluate the long‐term consequences of current decisions, and requires a set of principles guiding such altruism. We axiomatically develop a theory of pure, direct altruism: Altruism is pure if it concerns the total utility (rather than the mere consumption utility) of future generations, and direct if it directly incorporates the utility of all future generations. Our axioms deliver a new class of altruistic, forward‐looking preferences, whose weight put on the consumption of a future generation generally depends on the consumption of other generations. The only preferences lacking this dependence correspond to the quasi‐hyperbolic discounting model, which our theory characterizes. Our approach provides a framework to analyze welfare in the presence of altruistic preferences and addresses technical challenges stemming from the interdependent nature of such preferences.

Suggested Citation

  • Simone Galperti & Bruno Strulovici, 2017. "A Theory of Intergenerational Altruism," Econometrica, Econometric Society, vol. 85, pages 1175-1218, July.
    • Handle: RePEc:wly:emetrp:v:85:y:2017:i::p:1175-1218
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    1. Balbus, Łukasz & Reffett, Kevin & Woźny, Łukasz, 2022. "Time-consistent equilibria in dynamic models with recursive payoffs and behavioral discounting," Journal of Economic Theory, Elsevier, vol. 204(C).
    2. Dziewulski, Paweł, 2018. "Revealed time preference," Games and Economic Behavior, Elsevier, vol. 112(C), pages 67-77.
    3. Bosi, Stefano & Ha-Huy, Thai & Le Van, Cuong & Pham, Cao-Tung & Pham, Ngoc-Sang, 2018. "Financial bubbles and capital accumulation in altruistic economies," Journal of Mathematical Economics, Elsevier, vol. 75(C), pages 125-139.
    4. Pankaj Tiwari, 2023. "Analysing Green Self-efficacy and Green Altruism of Millennials Customers Toward Green Purchases Through the lens of the Theory of Planned Behaviour," Public Organization Review, Springer, vol. 23(4), pages 1545-1561, December.
    5. Gobbi, Paula Eugenia & Baudin, Thomas & De Rock, Bram, 2021. "Economics and family structures," CEPR Discussion Papers 16516, C.E.P.R. Discussion Papers.
    6. Mrdjan Milićev Mladjan & Dušan Zvonkov Marković, 2021. "Generational Responsibility in Consumption as a Response to Global Economic Crises," Sustainability, MDPI, vol. 13(6), pages 1-26, March.
    7. Nesje, Frikk, 2020. "Cross-dynastic Intergenerational Altruism," Working Papers 0678, University of Heidelberg, Department of Economics.
    8. Vásquez, Jorge & Weretka, Marek, 2020. "Affective empathy in non-cooperative games," Games and Economic Behavior, Elsevier, vol. 121(C), pages 548-564.
    9. Jean-Pierre Drugeon & Bertrand Wigniolle, 2021. "On Markovian collective choice with heterogeneous quasi-hyperbolic discounting," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1257-1296, November.
    10. Jorge Vasquez & Marek Weretka, 2020. "Co-worker altruism and unemployment," GRAPE Working Papers 55, GRAPE Group for Research in Applied Economics.
    11. Razo-De-Anda, Jorge Omar & Cruz-Aké, Salvador & Venegas-Martínez, Francisco, 2022. "¿Can the stock market boost economic growth? evidence from the Mexican real estate investment trust (REIT)," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 17(36), pages 9-32, Primer se.
    12. Choy, James P., 2020. "Religious rules as a means of strengthening family ties: Theory and evidence from the Amish," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 729-748.
    13. Stefano Bosi & Thai Ha‐Huy & Cao‐Tung Pham & Ngoc‐Sang Pham, 2022. "Ascendant altruism and asset price bubbles," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(4), pages 532-551, December.
    14. Ahlvik, Lassi, 2022. "Will of the living dead — The case for a backward-looking welfare function," Economics Letters, Elsevier, vol. 214(C).
    15. Bramoullé, Yann & ,, 2022. "Altruism Networks, Income Inequality, and Economic Relations," CEPR Discussion Papers 17000, C.E.P.R. Discussion Papers.
    16. Vásquez, Jorge & Weretka, Marek, 2021. "Co-worker altruism and unemployment," Games and Economic Behavior, Elsevier, vol. 130(C), pages 224-239.
    17. Gonzalez, Francisco M. & Lazkano, Itziar & Smulders, Sjak A., 2018. "Intergenerational altruism with future bias," Journal of Economic Theory, Elsevier, vol. 178(C), pages 436-454.
    18. Li, Shengwu & Yu, Ning Neil, 2018. "Context-dependent choice as explained by foraging theory," Journal of Economic Theory, Elsevier, vol. 175(C), pages 159-177.
    19. Hiroshi Fujiu, 2021. "Business Cycles in a Two-Sided Altruism Model," Mathematics, MDPI, vol. 9(17), pages 1-12, August.
    20. Antony Millner, 2016. "Heterogeneous intergenerational altruism," GRI Working Papers 226, Grantham Research Institute on Climate Change and the Environment.
    21. Paula Eugenia Gobbi & Marc Goñi, 2020. "Childless Aristocrats. Inheritance and the extensive margin of fertility," ULB Institutional Repository 2013/316217, ULB -- Universite Libre de Bruxelles.
    22. Arnaud Goussebaïle, 2022. "Democratic Climate Policies with Overlapping Generations," CER-ETH Economics working paper series 22/374, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    23. Niko Jaakkola & Antony Millner, 2022. "Nondogmatic Climate Policy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(4), pages 807-841.
    24. Łukasz Balbus & Anna Jaśkiewicz & Andrzej S. Nowak, 2020. "Equilibria in Altruistic Economic Growth Models," Dynamic Games and Applications, Springer, vol. 10(1), pages 1-18, March.
    25. Banerjee, Kuntal & Mitra, Tapan, 2018. "On Wold’s approach to representation of preferences," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 65-74.

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