Aggregation and Heterogeneous Time Preferences

Posted: 10 Aug 2005

See all articles by Christian Gollier

Christian Gollier

University of Toulouse 1 - Industrial Economic Institute (IDEI); CESifo (Center for Economic Studies and Ifo Institute)

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Abstract

We examine an economy whose consumers have different discount factors for utility, possibly not exponential. We characterize the properties of efficient allocations of resources and of the shadow prices that would decentralize such allocations. We show in particular that the representative agent has a decreasing discount rate when, as is usually posited, all of a group's members have a constant discount rate and decreasing absolute risk aversion preferences. We also identify conditions that lead the representative agent to have a rate of impatience that decreases with gross domestic product per capita.

Suggested Citation

Gollier, Christian and Zeckhauser, Richard J., Aggregation and Heterogeneous Time Preferences. Journal of Political Economy, Vol. 113, pp. 878-896, August 2005. Available at SSRN: https://ssrn.com/abstract=772082

Christian Gollier (Contact Author)

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

Manufacture des Tabacs
21 Allee de Brienne bat. F
Toulouse Cedex, F-31000
France
+33 61 12 86 30 (Phone)
+33 61 12 86 37 (Fax)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-384-9340 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-496-3783 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
375
PlumX Metrics