On Multiple Discount Rates
Christopher P. Chambers, Federico Echenique
Econometrica · 2018 · Volume 86 · Issue 4
Abstract
We study the problem of resolving conflicting discount rates via a social choice approach. We introduce several axioms, seeking to capture the tension between allowing for intergenerational comparisons of utility, and imposing intergenerational fairness. Depending on which axioms are judged appropriate, we are led to one of several conclusions: autilitarian,maxmin, or amulti-utilitarianrule, whereby a utility stream is judged by the worst in a set of utilitarian weighting schemes across discount rates.
Keywords
Global warming, maxmin expected utility, discounting, social discount factor, preference aggregation
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