Scandinavian Working Papers in Economics
Memorandum,
Oslo University, Department of Economics
No 18/2006: Sustainable recursive social welfare functions
Geir B. Asheim (), Tapan Mitra () and Bertil Tungodden ()
Additional contact information
Geir B. Asheim: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Tapan Mitra: Department of Economics, Cornell University, Postal: 448 Uris Hall, Ithaca, NY 14853, USA
Bertil Tungodden: Department of Economics, Norwegian School of Economics and Business Administration and Chr. Michelsen Institute,, Postal: Helleveien 30, 5045 Bergen, Norway , and Chr. Michelsen Institute, P.O. Box 6033, 5892 Bergen
Abstract: Koopmans’s (Econometrica 28, 287–309) axiomatization of discounted utilitarianism is based on seemingly compelling conditions, yet this criterion leads to hard-to-justify outcomes. The present analysis considers a class of sustainable recursive social welfare functions within Koopmans’s general framework. This class is axiomatized by means of a weak new equity condition (“Hammond Equity for the Future”) and general existence is established. Any member of the class satisfies the key axioms of Chichilnisky’s (Social Choice and Welfare 13, 231–257) “sustainable preferences”. The analysis singles out one of Koopmans’s original conditions as particularly questionable from an ethical perspective.
Keywords: Intergenerational justice; sustainability; discounted utilitarianism
32 pages, July 10, 2006
Full text files
Memo-18-2006.pdf
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