Renewable resource use with imperfect self-control

Holger Strulik and Katharina Werner

No 408, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We investigate renewable resources when the harvesting agents face self-control problems. Individuals are conceptualized as dual selves. The rational long-run self plans for the infinite future while the affective short-run self desires to maximize instantaneous profits. Depending on the degree of self-control, actual behavior is partly driven by short-run desires. This modeling represents impatience and present bias without causing time inconsistent decision making. In a model of a single harvesting agent (e.g. a fishery), we discuss how self-control problems affect harvesting behavior, resource conservation, and sustainability and discuss policies to curb overuse and potential collapse of the resource due to present-biased harvesting behavior. We then extend the model to several harvesting agents and show how limited self-control exacerbates the common pool problem. Finally, we investigate heterogenous agents and show that there are spillover effects of limited self-control in the sense that perfectly rational agents also behave less conservatively when they interact with agents afflicted by imperfect self-control.

Keywords: self-control; temptation; renewable resource use; sustainability; common pool resource management (search for similar items in EconPapers)
JEL-codes: D60 D90 O40 Q20 Q50 Q58 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cbe, nep-ene, nep-env, nep-gth and nep-ore
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Journal Article: Renewable resource use with imperfect self-control (2023)
Working Paper: Renewable Resource Use with Imperfect Self-Control (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:408

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