Pivato, Marcus (2008): Sustainable preferences via nondiscounted, hyperreal intergenerational welfare functions.

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Abstract
We define an intergenerational social welfare function Sigma from R^N (the set of all infinitehorizon utility streams) into *R (the ordered field of hyperreal numbers). The function Sigma is continuous, linear, and increasing, and is welldefined even on unbounded (e.g. exponentially increasing) utility streams. This yields a complete social welfare ordering on R^N which is Pareto and treats all generations equally (i.e. does not discount future utility). In particular, it is what Chichilnisky (1996) calls a `sustainable' preference ordering: it is neither a `dictatorship of the present' nor a `dictatorship of the future'.
We then show how an agent with no `pure' time preferences may still `informationally discount' the future, due to uncertainty. Last, we model intergenerational choice for an exponentially growing economy and population. In one parameter regime, our model shows `instrumental discounting' due to declining marginal utility of wealth. In another regime, we see a disturbing `Paradox of Eternal Deferral'.
Item Type:  MPRA Paper 

Original Title:  Sustainable preferences via nondiscounted, hyperreal intergenerational welfare functions 
Language:  English 
Keywords:  intergenerational choice; intertemporal choice; infinitehorizon; nondiscounted; sustainable; hyperreal; nonstandard real numbers; nonstandard analysis; 
Subjects:  D  Microeconomics > D7  Analysis of Collective DecisionMaking > D71  Social Choice; Clubs; Committees; Associations D  Microeconomics > D9  Intertemporal Choice and Growth > D90  General Q  Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q0  General > Q01  Sustainable Development 
Item ID:  7461 
Depositing User:  Marcus Pivato 
Date Deposited:  06. Mar 2008 07:16 
Last Modified:  21. Feb 2013 03:04 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/7461 