On discounting and voting in a simple growth model / by Kirill Borissov, Mikhail Pakhnin, Clemens Puppe
Contributor(s): Resource type: Ressourcentyp: Buch (Online)Book (Online)Language: English Series: Working paper series in economics ; No. 77Publisher: Karlsruhe : KIT [u.a.], December 2015Description: 1 Online-Ressource (34 Seiten)Subject(s): Genre/Form: Online resources: Summary: In dynamic resource allocation models, the non-existence of voting equilibria is a generic phenomenon due to the multi-dimensionality of the choice space even with agents heterogeneous only in their discount factors. Nevertheless, at each point of time there may exist a "median voter" whose preferred instantaneous consumption rate is supported by a majority of agents. Based on this observation, we propose an institutional setup ("intertemporal majority voting") in a Ramsey-type growth model with common consumption and heterogeneous agents, and show that it provides a microfoundation of the choice of the optimal consumption stream of the median agent. While the corresponding intertemporal consumption stream is in general not a Condorcet winner among all feasible paths, its induced instantaneous consumption rate receives a majority at each point in time in the proposed intertemporal majority voting procedure. We also provide a characterization of balanced-growth and steady-state voting equilibria in the case in which agents may differ not only in their time preference, but also in their instantaneous utility functions.PPN: PPN: 84397138XNo physical items for this record
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