Collective Dynamic Choice: The Necessity of Time Inconsistency
33 Pages Posted: 31 Oct 2010 Last revised: 23 Nov 2014
Date Written: November 2014
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: Suggested Citation