Creator

• Golosov, Mikhail
• Jones, Larry E.
• Tertilt, Michèle

Series

• Working paper (Federal Reserve Bank of Minneapolis. Research Department)

Issue number

• 630

Date created

• 2004-01

Abstract

• In this paper, we generalize the notion of Pareto-efficiency to make it applicable to environments with endogenous populations. Two efficiency concepts are proposed, P-efficiency and A-efficiency. The two concepts differ in how they treat people who are not born. We show how these concepts relate to the notion of Pareto-efficiency when fertility is exogenous. We then prove versions of the first welfare theorem assuming that decision making is efficient within the dynasty. Finally, we give two sets of sufficient conditions for noncooperative equilibria of family decision problems to be efficient. These include the Barro and Becker model as a special case.

Keyword

• Fertility
• First welfare theorem
• Pareto optimality
• Altruism
• Dynasty

Related information

• Published in Econometrica (Vol. 75, Iss. 4, July 2007, pp. 1039-1071), https://doi.org/10.1111/j.1468-0262.2007.00781.x.

Corporate Author

• Federal Reserve Bank of Minneapolis. Research Department

Publisher

• Federal Reserve Bank of Minneapolis

Resource type

• Research Paper

DOI

•  https://doi.org/10.21034/wp.630

In Collection:

• Working Papers

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