The limit of discounted utilitarianism

Arbeitspapier

This paper presents an infinite-horizon version of intergenerational utilitarianism that is both satisfactorily complete and consistent. By studying discounted utilitarianism as the discount factor tends to one, we obtain a welfare criterion - limit-discounted utilitarianism - that combines efficiency and the equal treatment of generations with analytical tractability and a high degree of comparability. We show that limit-discounted utilitarianism satisfies a number of consistency properties; in particular, it provides (i) an intuitive link between preferences over infinite-horizon streams and large, but finite-horizon truncations, and (ii) a complete view of the consequences of delaying streams with well-defined finite averages. The latter is formulated through a principle of compensation. Through this compensation principle, limit-discounted utilitarianism gives a coherent view on the consequences of delaying welfare which is compatible with stationarity. Limit-discounted utilitarianism is characterized on a large domain of infinite-horizon utility streams.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 748

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Analysis of Collective Decision-Making: General ; Micro-Based Behavioral Economics: General‡
• Subject: intergenerational equity ; aggregating infinite utility streams ; ethical social welfare relations

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jonsson, Adam ; Voorneveld, Mark
• Event: Veröffentlichung
• (who): Stockholm School of Economics, The Economic Research Institute (EFI)
• (where): Stockholm
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/122141
• Last update: 10.03.2025, 11:42 AM CET