Time consistency and impure benevolent planner

The only way to make the Pareto condition compatible with a social planner with exponential discounting is the dictatorship. Unlike the previous studies, we investigate the compatibility of the Pareto condition with an impure social planner who has a dynamically consistent self-control utility function characterized by Gul and Pesendorfer and Noor. We require that a social planner is tempted to adopt the majority’s opinion when there is a conflict of opinions among individuals. Under the Pareto condition and the temptation condition described above, we show the following two ways of avoiding the dictatorship result:

1. We accept a social planner with temptation from immediate consumption and avoid dictatorship by allowing the temptation utility to reflect the static tastes of multiple individuals.
2. Instead of adopting a more far-sighted social planner with temptation from consumption streams, we allow the preferences of at most two individuals, including their time preferences, to be reflected into the social planners.

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