Download this Paper Open PDF in Browser

Collective Dynamic Choice: The Necessity of Time Inconsistency

33 Pages Posted: 31 Oct 2010 Last revised: 23 Nov 2014

Matthew O. Jackson

Stanford University - Department of Economics; Santa Fe Institute; Canadian Institute for Advanced Research (CIFAR)

Leeat Yariv

Princeton University; California Institute of Technology - Division of the Humanities and Social Sciences

Date Written: November 2014

Abstract

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, every Pareto efficient and non-dictatorial method of aggregating utility functions must be time-inconsistent. We also show that decisions made via non-dictatorial voting methods are intransitive.

Keywords: Preference Aggregation, Collective Preferences, Time Consistency, Intransitive Preferences, Voting, Cyclic Preferences, Present Bias, Hyperbolic Discounting, Social Welfare Ordering

JEL Classification: D72, D71, D91, D03, D11, E24

Suggested Citation

Jackson, Matthew O. and Yariv, Leeat, Collective Dynamic Choice: The Necessity of Time Inconsistency (November 2014). Available at SSRN: https://ssrn.com/abstract=1699444 or http://dx.doi.org/10.2139/ssrn.1699444

Matthew O. Jackson (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
1-650-723-3544 (Phone)

HOME PAGE: http://www.stanford.edu/~jacksonm

Santa Fe Institute

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Canadian Institute for Advanced Research (CIFAR) ( email )

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

Leeat Yariv

Princeton University ( email )

Princeton, NJ 08544-1021
United States

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States

Paper statistics

Downloads
876
Rank
21,225
Abstract Views
3,861