We prove that if each generation cares, non-paternalistically, about other generations' wellbeing rather than about their choices, and do not curb or otherwise alter future generations' choice sets, then backward induction intergenerational choice paths are efficient. This somewhat surprising result implies that intergenerational inefficiencies, to the extent that they do occur, are not due to different generations having different preferences, and prior generations trying to tip the scales in favor of their own tastes and values.
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- Intergenerational efficiency
- Purely affective interactions