Maya Eden, University of Zurich

"Fixed-Point Utilitarianism"

Abstract

How should policymakers make decisions that affect the population trajectory? I propose a choice rule which reflects the goal of maximizing the sum of utilities of those people who will end up existing. I consider an environment in which each person exists with probability zero, regardless of the chosen policy. Each potential person’s utility from a policy is evaluated conditional on their existence. The decision maker strives to “do right” by those people who will end up existing, by selecting a policy that maximizes the sum of their utilities (conditional on existence). This implies a solution to a fixed-point problem. I demonstrate the implications of this choice rule in a two-period macroeconomic model in which living standards depend on the size of the population and parents have preferences over the number of children. In this model, production externalities provide the only reasons to encourage or discourage fertility.

Contact person: Frikk Nesje