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  3. American Economic Journal: Microeconomics
  4. November 2015
  5. Collective Dynamic Choice: The Necessity of Time Inconsistency

American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

Collective Dynamic Choice: The Necessity of Time Inconsistency

  • Matthew O. Jackson
  • Leeat Yariv
American Economic Journal: Microeconomics
vol. 7, no. 4, November 2015
(pp. 150–78)
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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. (JEL D71, D72, D91)

Citation

Jackson, Matthew O., and Leeat Yariv. 2015. "Collective Dynamic Choice: The Necessity of Time Inconsistency." American Economic Journal: Microeconomics, 7 (4): 150–78. DOI: 10.1257/mic.20140161

Additional Materials

JEL Classification

  • D71 Social Choice; Clubs; Committees; Associations
  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • D15 Intertemporal Household Choice; Life Cycle Models and Saving
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