Article
Allaisanonymity as an alternative to the discountedsum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations
University Library of Munich, Germany, MPRA Paper 01/2006;
Source: RePEc
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Article: Optimization by Vector Spaces
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ABSTRACT: Is discounting of future decisionmakers’ consumption utilities consistent with "pure" altruism toward those decisionmakers, that is, a concern that they are better off according to their own, likewise forwardlooking, preferences? It turns out that the answer is positive for many but not all discount functions used in the economics literature. In particular, "hyperbolic" discounting of the form used by Phelps and Pollak (1968) and Laibson (1997) is consistent with exponential altruism towards all future generations. More generally, we establish a onetoone relationship between discount functions and altruism weight systems, and provide sufficient, as well as necessary, conditions for discount functions to be consistent with pure altruism.01/2005;
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