The value of limited altruism

Discounting the utilities of future people or giving smaller weights to gro ups other than one's own is often criticized on the grounds that the result ing objective function differs from the ethically appropriate one. This pap er investigates the consequences of changes in the discount rate and weight s when they are moved toward the warranted ones. Using the utilitarian valu e function, it is shown that, except in restrictive special casts, those mo ves do not necessarily lead to social improvements. We suggest that limitat ions to altruism are better captured by maximizing the appropriate value fu nction subject to lower bounds on some utilities. Journal of Economic Class ification Numbers: D63, D71. (C) 2000 Academic Press.