Infinite-horizon choice functions (Q2268133)

This paper considers choice functions over infinite horizon paths of production and consumption, where there is a single resource and the production technology is stationary. The main result characterizes all choice functions which satisfy efficiency and time consistency (they have stationary consumption and inheritance functions, and satisfy the capital value transversality condition). Additionally, if a choice function satisfies either the Suppes-Sen or Pigou-Dalton criterion, then the consumption and inheritance functions are monotone with respect to time. These are much better results that would have been achieved by simply trying to order consumption streams.