Work

Time consistency and time invariance in collective intertemporal choice

Year: 2018

Type: article

Abstract: Recent work on collective intertemporal choice suggests that non-dictatorial social preferences are generically time inconsistent. We argue that this claim conflates time consistency with two distinct properties of preferences: stationarity and time invariance. While time invariance and stationarity together imply time consistency, the converse does not hold. Although non-dictatorial social preferences cannot be stationary, they may be time consistent if time invariance is abandoned. If individuals are discounted utilitarians, revealed preference provides no guidance on whether social preferences should be time consistent or time invariant. Nevertheless, we argue that time invariant social preferences are often normatively and descriptively problematic.

Source: Journal of Economic Theory

DOI: 10.1016/j.jet.2018.03.002

Authors: Antony Millner, Geoffrey Heal

Institutions: London School of Economics and Political Science, National Bureau of Economic Research, Columbia University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,087

Funder: Economic and Social Research Council