Deductive reasoning in Extensive Games

We justify the application to extensive games of the concept of ‘fully permissible sets’, which corresponds to choice sets when there is common certain belief of the event that each player prefer one strategy to another if and only if the former weakly dominates the latter on the set of all opponent strategies or on the union of the choice sets that are deemed possible for the opponent. he e tensive games considered illustrate how our concept yields support to forward induction, without necessarily promoting backward induction.Extensive Game; Deductive reasoning; backward induction

Sustainability : ethical foundations and economic properties

The author interprets development to be sustainable if it involves a nondecreasing quality of life. He introduces a concept of justice, and shows that a development path must be sustainable to prevent injustice. He argues, and illustrates through growth models, that altruism alone does not - even in the context of an economically efficient market economy - ensure sustainability. In particular, technologies with complementarity between manmade and natural capital represent cases where sustainability need not result. Thus, policies aimed at economic efficiency, such as internalizing external effects, need not generate sustainable development. The author argues that a positive interest rate is not inconsistent with sustainable development. He also maintains that, even in a perfect market economy, prices may not convey whether investments in manmade capital are sufficient to compensate for the depletion of natural capital. In particular, a non-negative market value of net investment is not sufficient for the present quality of life to be sustainable. Finally, he emphasizes that public policy aimed at sustainable development should strengthen the mechanisms for redistribution from the present to the future.Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,International Terrorism&Counterterrorism,Development Economics&Aid Effectiveness

Proper Consistency

Proper consistency is defined by the properties that each player takes all opponent strategies into account (is cautious) and deems one opponent strategy to be infinitely more likely than another if the opponent prefers the one to the other (respects preferences). When there is common certain belief of proper consistency, a most preferred strategy is properly rationalizable. Any strategy used with positive probability in a proper equilibrium is properly rationalizable. Only strategies that lead to the backward induction outcome is properly rationalizable in the strategic form of a generic perfect information game. Proper rationalizability can be used to test the robustness of inductive procedures.

Fixed-step anonymous overtaking and catching-up

We investigate criteria for evaluating infinite utility streams that satisfy Fixed-step anonymity and includes some notion of overtaking or catching-up. We do so in a generalized setting which do not require us to specify the underlying finite-dimensional criterion (e.g., utilitarianism or leximin). We present axiomatizations that rely on weaker axioms than those in the literature, and which in one case is new. We also provide a complete analysis of the relationships between the symmetric parts of these criteria and likewise for the asymmetric parts.Intergenerational justice; Utilitarianism; Leximin

Amissibility and Common Belief

The concept of ‘fully permissible sets ’ is defined by an algorithm that eliminate strategy subset . It is characterized as choice sets when there is common certain belief of the event that each player prefer one strategy to another if and only if the former weakly dominate the latter on the sets of all opponent strategie or on the union of the choice sets that are deemed possible for the opponent. the concept refines the Dekel-Fudenberg procedure and captures aspects of forward induction.Admissibility; Denkel-Fudenberg; common belief;

Climate Policy under Sustainable Discounted Utilitarianism

Empirical evaluation of policies to mitigate climate change has been largely confined to the application of discounted utilitarianism (DU). DU is controversial, both due to the conditions through which it is justified and due to its consequences for climate policies, where the discounting of future utility gains from present abatement efforts makes it harder for such measures to justify their present costs. In this paper, we propose sustainable discounted utilitarianism (SDU) as an alternative principle for evaluation of climate policy. Unlike undiscounted utilitarianism, which always assigns zero relative weight to present utility, SDU is an axiomatically based criterion, which departs from DU by assigning zero weight to present utility if and only if the present is better off than the future. Using the DICE integrated assessment model to run risk analysis, we show that it is possible for the future to be worse off than the present along a ‘business as usual’ development path. Consequently SDU and DU differ, and willingness to pay for emissions reductions is (sometimes significantly) higher under SDU than under DU. Under SDU, stringent schedules of emissions reductions increase social welfare, even for a relatively high utility discount rate.climate change, discounted utilitarianism, intergenerational equity, sustainable development, sustainable discounted utilitarianism

Sustainability and Discounted Utilitarianism in Models of Economic Growth

Discounted utilitarianism treats generations unequally and leads to seemingly unappealing consequences in some models of economic growth. Instead, this paper presents and applies sustainable discounted utilitarianism (SDU). SDU respects the interests of future generations and resolves intergenerational conflicts by imposing on discounted utilitarianism that the evaluation be insensitive to the interests of the present generation if the present is better off than the future. An SDU social welfare function always exists. We provide a convenient sufficient condition to identify SDU optima and apply SDU to two well-known models of economic growth. We also investigate the axiomatic basis for SDU.intergenerational equity, sustainability, discounted utilitarianism, egalitarian consumption streams, efficiency, exhaustible resources

Green National Accounting for Welfare and Sustainability: A Taxonomy of Assumptions and Results

This paper summarizes assumptions made and results obtained in parts of the literature on welfare and sustainability accounting. I consider five different assumptions that can be imposed independently of each other, producing 32 different combinations. This taxonomy is used to organize results in welfare and sustainability accounting. The analysis illustrates how stronger results require stronger assumptions and thereby impose harder informational requirements.national accounting, dynamic welfare, sustainability

Generalized time-invariant overtaking

We present a new version of the overtaking criterion, which we call generalized time invariant overtaking. The generalized time-invariant overtaking criterion (on the space of infinite utility streams) is defined by extending proliferating sequences of complete and transitive binary relations defined on finite dimensional spaces. The paper presents a general approach that can be specialized to at least two, extensively researched examples, the utilitarian and the leximin orderings on a finite dimensional Euclidean space.intergenerational justice, utilitarianism, leximin.