Discounting and extraction behavior in continuous time resource experiments

Marion Davin (), Dimitri Dubois (), Katrin Erdlenbruch () and Marc Willinger ()
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Marion Davin: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Dimitri Dubois: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Katrin Erdlenbruch: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Marc Willinger: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier

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Abstract: Experimenting with dynamic games raises issues about implementing discounting in experiments. Theoretical rational decision-makers evaluate payoff streams by converting them to a reference period, often "time zero." In experiments, subjects can adapt their strategy continuously. We explore individual behavior in a dynamic resource extraction experiment with two treatments: "z-discounting" (evaluating gains at time zero) and "p-discounting" (evaluating gains in present-time equivalents). Contrary to theoretical predictions, our data shows a significant positive treatment effect, indicating more substantial extraction under p-discounting. This challenges the theoretical model and prompts discussion on methodological considerations for discounting in laboratory settings.

Keywords: laboratory experiment; time consistency; continuous time; discounting; dynamic optimization (search for similar items in EconPapers)
Date: 2025-08-21
New Economics Papers: this item is included in nep-exp, nep-gth and nep-inv
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-05234840v1
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Published in Resource and Energy Economics, 2025, 84, ⟨10.1016/j.reseneeco.2025.101531⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05234840

DOI: 10.1016/j.reseneeco.2025.101531

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