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Fundamental utilitarianism and intergenerational equity with extinction discounting
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Chichilnisky, Graciela, Hammond, Peter J. and Stern, Nicholas (2020) Fundamental utilitarianism and intergenerational equity with extinction discounting. Social Choice and Welfare, 54 (2-3). pp. 397-427. doi:10.1007/s00355-019-01236-z ISSN 0176-1714.
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Official URL: https://doi.org/10.1007/s00355-019-01236-z
Abstract
Ramsey famously condemned discounting “future enjoyments” as “ethically indefensible”. Suppes enunciated an equity criterion which, when social choice is utilitarian, implies giving equal weight to all individuals’ utilities. By contrast, Arrow (Contemporary economic issues. International Economic Association Series. Palgrave Macmillan, London, 1999a; Discounting and Intergenerational Effects, Resources for the Future Press, Washington DC, 1999b) accepted, perhaps reluctantly, what he called Koopmans’ (Econometrica 28(2):287–309, 1960) “strong argument” implying that no equitable preference ordering exists for a sufficiently unrestricted domain of infinite utility streams. Here we derive an equitable utilitarian objective for a finite population based on a version of the Vickrey–Harsanyi original position, where there is an equal probability of becoming each person. For a potentially infinite population facing an exogenous stochastic process of extinction, an equitable extinction biased original position requires equal conditional probabilities, given that the individual’s generation survives the extinction process. Such a position is well-defined if and only if survival probabilities decline fast enough for the expected total number of individuals who can ever live to be finite. Then, provided that each individual’s utility is bounded both above and below, maximizing expected “extinction discounted” total utility—as advocated, inter alia, by the Stern Review on climate change—provides a coherent and dynamically consistent equitable objective, even when the population size of each generation can be chosen.
Item Type: | Journal Article | ||||||||
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Subjects: | B Philosophy. Psychology. Religion > B Philosophy (General) H Social Sciences > HM Sociology H Social Sciences > HQ The family. Marriage. Woman |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Utilitarianism, Intergenerational relations, Generations | ||||||||
Journal or Publication Title: | Social Choice and Welfare | ||||||||
Publisher: | Springer | ||||||||
ISSN: | 0176-1714 | ||||||||
Official Date: | March 2020 | ||||||||
Dates: |
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Volume: | 54 | ||||||||
Number: | 2-3 | ||||||||
Page Range: | pp. 397-427 | ||||||||
DOI: | 10.1007/s00355-019-01236-z | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Reuse Statement (publisher, data, author rights): | This is a post-peer-review, pre-copyedit version of an article published in Social Choice and Welfare. The final authenticated version is available online at: http://dx.doi.org/10.1007/s00355-019-01236-z | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 9 January 2020 | ||||||||
Date of first compliant Open Access: | 9 April 2020 | ||||||||
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