Two-sided altruism, Lindahl equilibrium, and Pareto optimality in overlapping generations models

Abstract

This paper extends the Samuelsonian overlapping generations general equilibrium framework to encompass a variety of altruistic preferences by recasting it into a Lindahl equilibrium framework. The First and the Second Welfare theorems hold for Lindahl equilibrium with respect to the Malinvaud optimality criterion but not with respect to the Pareto optimality criterion. A complete characterization of Pareto optimal allocations is provided using the Lindahl equilibrium prices.

Publication
Economic Theory, (27), 3, pp. 729-736, https://doi.org/10.1007/s00199-004-0562-9