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Sustainable exploitation of a natural resource: a satisfying use of Chichilnisky’s criterion

  • Charles Figuières


  • Mabel Tidball

Chichilnisky's criterion for sustainability has the merit to be, so far, the unique explicit, complete and continuous social welfare criterion that combines successfully the requirement of Weak Pareto with an instrumental notion of intergenerational equity (no dictatorship of the present and no dictatorhsip of the future). But it has one important drawback: in the context of renewable resources, there exists no exploitation path that maximizes this criterion. The present article suggests a way to cope with this weakness. We give good reasons to restrict admissible controls to the set of convex combinations between the discounted utilitarian program and the golden rule program. It is shown that optimal paths in this set exists under rather weak sufficient conditions on the fundamentals of the problem.

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Article provided by Springer in its journal Economic Theory.

Volume (Year): 49 (2012)
Issue (Month): 2 (February)
Pages: 243-265

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Handle: RePEc:spr:joecth:v:49:y:2012:i:2:p:243-265
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  1. Geir Asheim & Tapan Mitra & Bertil Tungodden, 2012. "Sustainable recursive social welfare functions," Economic Theory, Springer, vol. 49(2), pages 267-292, February.
  2. 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.
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  9. Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
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  12. Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
  13. Luc LAUWERS, 2009. "Ordering infinite utility streams comes at the cost of a non-Ramsey set," Center for Economic Studies - Discussion papers ces09.05, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  14. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
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