Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 06/2015: Evaluating Intergenerational Risks: Probabillity Adjusted Rank-Discounted Utilitarianism

Geir B. Asheim () and Stéphane Zuber ()
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
Stéphane Zuber: Paris School of Economics and CNRS, Postal: Centre d'Economie de la Sorbonne , France

Abstract: Climate policies have stochastic consequences that involve a great number of generations. This calls for evaluating social risk (what kind of societies will future people be born into) rather than individual risk (what will happen to people during their own lifetimes). As a response we propose and axiomatize probability adjusted rank-discounted critical-level generalized utilitarianism (PARDCLU), through a key axiom that requires that the social welfare order both be ethical and satisfy first-order stochastic dominance. PARDCLU is useful for evaluating intergenerational risks, is ethical in contrast to discounted utilitarianism, and avoids objections that have been raised against other ethical criteria. PARDCLU is shown to handle situations with positive probability of human extinction, and is linked to decision theory by yielding rank-dependent expected utilitarianism - but with additional structure - in a special case.

Keywords: Social evaluation; population ethics; decision-making under risk; critical-level utilitarianism; social discounting

JEL-codes: D63; D71; D81; H43; Q54; Q56

36 pages, February 20, 2015

Full text files 

memo-06-2015.pdf PDF-file

Download statistics

Questions (including download problems) about the papers in this series should be directed to Mari Strønstad Øverås ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:osloec:2015_006This page generated on 2024-09-13 22:16:46.