Intergenerational consumption rules: An axiomatization of utilitarianism and egalitarianism
type: Item
instance of: scholarly article
title: Intergenerational consumption rules: An axiomatization of utilitarianism and egalitarianism
zbMATH Open document ID: 0604.90010
DOI: 10.1016/0022-0531(86)90119-5
published in: Journal of Economic Theory
publication date: 1986-01-01T00:00:00Z
review text: Rules are characterized that prescribe intergenerational consumption programs. The framework for this analysis is an infinite horizon, a single aggregate consumption good and a single consumer alive at any instant who represents his generation. An intergenerational allocation problem is defined by specifying a feasible set of consumption profiles. A solution of an allocation problem specifies a unique consumption stream from the feasible set and this consumption path resolves a conflict between generations. A set of axioms is formulated which are shown to characterize the egalitarian and the utilitarian consumption rules. The egalitarian consumption rule prescribes the largest constant consumption path that is feasible. In contrast, the utilitarian consumption rule admits trade-offs between generations in the sense that the relative magnitudes of consumption levels prescribed for any two generations can change depending on the price vector. The axioms which are considered are: efficiency, positivity, equity, symmetry, homogeneity, consistency, and continuity. Theorem 1 characterizes a consumption rule which satisfies all of the above properties except continuity. This rule consists of various utilitarian and egalitarian components. Theorem 2 uses the continuity property in addition and provides a characterization of the egalitarian rule on one side and the utilitarian rule on the other. It is shown that these rules exist on different price domains. Theorem 3 finally gives a characterization of the egalitarian consumption rule for a somewhat broader environment. In order to enlarge the environment a weaker version of the ''weak axiom of revealed preference'' is introduced.
Mathematics Subject Classification ID: 91B14
zbMATH DE Number: 3976690
zbMATH Keywords: axiomatic approach
zbMATH Keywords: intergenerational consumption programs
zbMATH Keywords: infinite horizon
zbMATH Keywords: allocation problem
zbMATH Keywords: egalitarian and the utilitarian consumption rules
zbMATH Keywords: weak axiom of revealed preference
author: Larry G. Epstein
reviewed by: Wulf Gaertner
MaRDI profile type: Publication
full work available at URL: 0022-0531(86)90119-5
OpenAlex ID: W2023650949
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description: scientific article; zbMATH DE number 3976690