Intergenerational experimentation and catastrophic risk
Fikri Pitsuwan (Center of Economic Research, ETH Zurich)
GPI Working Paper No. 6 - 2022
I study an intergenerational game in which each generation experiments on a risky technology that provides private benefits, but may also cause a temporary catastrophe. I find a folk-theorem-type result on which there is a continuum of equilibria. Compared to the socially optimal level, some equilibria exhibit too much, while others too little, experimentation. The reason is that the payoff externality causes preemptive experimentation, while the informational externality leads to more caution. Remarkably, for a particular temporal discount rate, there exists an optimal equilibrium in which the behavior of two-period-lived agents align with that of an infinitely-lived social planner. In a model with a political process, unequal political power, biased towards the young, supports an optimal equilibrium most often. Extensions include finite horizon, irreversible catastrophes, and risk-aversion.
Other working papers
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Longtermism holds roughly that in many decision situations, the best thing we can do is what is best for the long-term future. The scope question for longtermism asks: how large is the class of decision situations for which longtermism holds? Although longtermism was initially developed to describe the situation of…
Is In-kind Kinder than Cash? The Impact of Money vs Food Aid on Social Emotions and Aid Take-up – Samantha Kassirer, Ata Jami, & Maryam Kouchaki (Northwestern University)
There has been widespread endorsement from the academic and philanthropic communities on the new model of giving cash to those in need. Yet the recipient’s perspective has mostly been ignored. The present research explores how food-insecure individuals feel and respond when offered either monetary or food aid from a charity. Our results reveal that individuals are less likely to accept money than food aid from charity because receiving money feels relatively more shameful and relatively less socially positive. Since many…
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Critical-set views avoid the Repugnant Conclusion by subtracting some constant from the welfare score of each life in a population. These views are thus sensitive to facts about biographical identity: identity between lives. In this paper, I argue that questions of biographical identity give us reason to reject critical-set views and embrace the total view. I end with a practical implication. If we shift our credences towards the total view, we should also shift our efforts towards ensuring that humanity survives for the long term.