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Intergenerational Justice When Future Worlds are Uncertain

  • Humberto Llavador
  • John E. Roemer and Joaquim Silvestre

Let there be a positive (exogenous)probability that, at each date, the human species will disappear. We postulate an Ethical Observer (EO) who maximizes intertemporal welfare under this uncertainty, with expected-utility preferences. Various social welfare criteria entail alternative von Neumann-Morgensternutility functionsfor the EO: utilitarian, Rawlsian, and an extension of the latter that corrects for the size of population. Our analysis covers, first, a cake-eating economy (without production), where the utilitarian and Rawlsian recommend the same allocation. Second, a productive economy with education andc apital, where it turns out that there commendations of the two EOs are in general different. But when the utilitarian program diverges, thenwe prove it is optimal for the extended Rawlsian to ignore the uncertainty concerning the possible disappearance of the human species in the future. We conclude by discussing the implications for intergenerational welfare maximization in the presence of global warming.

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Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 473.

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Date of creation: Jun 2010
Date of revision:
Handle: RePEc:bge:wpaper:473
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  1. repec:oup:restud:v:45:y:1978:i:1:p:103-20 is not listed on IDEAS
  2. Humberto Llavador & John E. Roemer & Joaquim Silvestre & Joaquim Silvestre, 2009. "A Dynamic Analysis Of Human Welfare In A Warming Planet”," Working Papers 95, University of California, Davis, Department of Economics.
  3. Basu, Kaushik & Mitra, Tapan, 2007. "Utilitarianism for infinite utility streams: A new welfare criterion and its axiomatic characterization," Journal of Economic Theory, Elsevier, vol. 133(1), pages 350-373, March.
  4. Dasgupta, Partha, 1974. "On some alternative criteria for justice between generations," Journal of Public Economics, Elsevier, vol. 3(4), pages 405-423, November.
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