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T-Space at The University of Toronto Libraries >
Theoretical Economics >
Volume 2, Number 2 (June 2007) >

Please use this identifier to cite or link to this item: http://hdl.handle.net/1807/9745

Title: Can intergenerational equity be operationalized?
Authors: William R. Zame; UCLA
Keywords: Intergenerational equity, infinite utility streams, long run averages, overtaking criterion, Utilitarianism
D60, D70, D90
Issue Date: 3-Jun-2007
Publisher: Theoretical Economics
Citation: Theoretical Economics; Vol 2, No 2 (2007)
Abstract: [This item is a preserved copy. To view the original, visit http://econtheory.org/] A long Utilitarian tradition has the ideal of equal regard for all individuals, both those now living and those yet to be born. The literature formalizes this ideal as asking for a preference relation on the space of infinite utility streams that is complete, transitive, invariant to finite permutations, and respects the Pareto ordering; an ethical preference relation, for short. This paper argues that operationalizing this ideal is problematic. Most simply, every ethical preference relation has the property that almost all (in the sense of outer measure) pairs of utility streams are indifferent. Even if we abandon completeness and respect for the Pareto ordering, every irreflexive preference relation that is invariant to finite permutations has the property that almost all pairs of utility streams are incomparable (not strictly ranked). Moreover, no ethical preference relation can be measurable. As a consequence, the existence of an ethical preference relation is independent of the axioms used in almost all of formal economics and all of classical analysis. Finally, even if an ethical preference relation exists, it cannot be "explicitly described." These results have implications for game theory, for macroeconomics, and for economic development.
URI: http://hdl.handle.net/1807/9745
Other Identifiers: http://econtheory.org/ojs/index.php/te/article/view/20070187
Rights: Authors who publish in <i>Theoretical Economics</i> will release their articles under the <a href="http://creativecommons.org/licenses/by-nc/2.5/">Creative Commons Attribution-NonCommercial license</a>. This license allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given.
Appears in Collections:Volume 2, Number 2 (June 2007)

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