Intergenerational altruism with future bias

A-Tier
Journal: Journal of Economic Theory
Year: 2018
Volume: 178
Issue: C
Pages: 436-454

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that standard preferences of altruistic overlapping generations exhibit future bias, which involves preference reversals associated with increasing impatience. This underlies a conflict of interest between successive generations. We explore the implications of this conflict for intergenerational redistribution when there is a sequence of utilitarian governments representing living generations and choosing policies independently over time. We argue that future bias creates incentives to legislate and sustain a pay-as-you-go pension system, which every government views as a self-enforcing commitment mechanism to increase future old-age transfers.

Technical Details

RePEc Handle
repec:eee:jetheo:v:178:y:2018:i:c:p:436-454
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25