Fair intergenerational sharing of a natural resource

In this article, overlapping generations are extracting a natural resource over an infinite future. We examine the fair allocation of resource and compensations among generations. Fairness is defined by core lower bounds and aspiration upper bounds. The core lower bounds require that every coalition of generations obtains at least what it could achieve by itself. The aspiration upper bounds require that no coalition of generations enjoys a higher welfare than it would achieve if nobody else extracted the resource. We show that, upon existence, the allocation that satisfies the two fairness criteria is unique and assigns to each generation its marginal contribution to the preceding generation. Finally, we describe the dynamics of such an allocation.(This abstract was borrowed from another version of this item.)