The Cesàro average criterion on infinite utility streams and its extensions

Abstract

When evaluating policies that affect future generations, the most commonly used criterion is the discounted utilitarian rule. However, in terms of intergenerational fairness, it is difficult to justify prioritizing the current generation over future generations. This paper axiomatically examines impartial utilitarian rules over infinite-dimensional utility streams. We provide simple characterizations of the social welfare ordering that evaluates utility streams by their long-run average on the domain where the average exists. Furthermore, we derive the necessary and sufficient conditions for the same axioms to hold in a more general domain, the set of bounded utility streams. Some of these results are closely related to the Banach limits, a well-known generalization of the classical limit concept for streams. Thus, this paper can be seen as proposing an appealing subclass of Banach limits through axiomatic analysis.