Abstract

The article shows that a Paretian social welfare function can be history independent and time consistent only if a stringent set of conditions is verified. Individual utilities must be additive. The social welfare function must be a linear combination of these utilities. Social preferences are stationary only if, in addition, all individuals have the same constant discount rate. The results are implemented in two frameworks: deterministic dynamic choice and dynamic choice under uncertainty. The applications highlight that the conditions are unlikely to be met by individual preferences, and that they severely restrict social preferences