Characterization of the Maximin Choice Function in a Simple Dynamic Economy

In the literature of intergenerational equity, Rawlsian maximin principle is one of the most well-known criteria for distributive justice among generations.¹ Since this principle has an intuitive appeal to egalitarian writers, several attempts to characterize the principle have been made in welfare economics. Arrow (1973), Dasgupta (1974a, b), and Riley (1976) scrutinized the performance thereof in the context of optimal growth. Arrow shows that the utility path as well as the consumption path generated by the maximin principle has a saw-tooth shape. Dasgupta shows that it gives rise to a logical deficit such as time-inconsistency. The other line of researches has been stimulated by the axiomatic approaches of Hammond (1976, 1979) and Sen (1970, 1977). In this line, researchers extended axiomatizations of the maximin principle and applied them to intergenerational equity. The maximin path is characterized by a constant path, which emphasizes its egalitarian perspective.²