exposita note: Preservation and exogenous uncertain future preferences

Alain Ayong Le Kama ()

Economic Theory, 2001, vol. 18, issue 3, pages 745-752

Abstract: We extend the Beltratti, Chichilnisky and Heal's (1993) and (1998) continuous-time stochastic dynamic framework to analyze the optimal depletion of an asset whose consumption is irreversible, in the face of uncertainty about future preferences. Their model is rather general and so the results are general qualitative theorems. We show that in some interesting cases it is possible to solve their model analytically. The cases involve constant elasticity utility functions and the assumption of a Poisson process for the evolution of preferences.

Keywords: Preservation of natural resources; Uncertainty; Preferences. (search for similar items in EconPapers)
JEL-codes: O4 Q2 (search for similar items in EconPapers)
Date: 2001-06-11
Note: Received: September 13, 1999; revised version: November 23, 1999

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