Collective Intertemporal Choice: The Possibility of Time Consistency

17 Pages Posted: 22 Aug 2016 Last revised: 19 Jul 2023

See all articles by Antony Millner

Antony Millner

London School of Economics & Political Science (LSE)

Geoffrey M. Heal

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER)

Date Written: August 2016

Abstract

Recent work on collective intertemporal choice suggests that non-dictatorial social preferences are generically time inconsistent. We argue that this claim conflates time consistency with two distinct properties of preferences: stationarity and time invariance. While the conjunction of time invariance and stationarity implies time consistency, the converse does not hold. Although social preferences cannot be stationary, they may be time consistent if time invariance is abandoned. If individuals are discounted utilitarians, revealed preference provides no guidance on whether social preferences should be time consistent or time invariant. Nevertheless, we argue that time invariant social preferences are often normatively and descriptively problematic.

Suggested Citation

Millner, Antony and Heal, Geoffrey M., Collective Intertemporal Choice: The Possibility of Time Consistency (August 2016). NBER Working Paper No. w22524, Available at SSRN: https://ssrn.com/abstract=2827442

Antony Millner (Contact Author)

London School of Economics & Political Science (LSE) ( email )

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Geoffrey M. Heal

Columbia University - Columbia Business School, Finance ( email )

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212-316-9219 (Fax)

HOME PAGE: http://www.gsb.columbia.edu/faculty/gheal/

National Bureau of Economic Research (NBER)

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