Present Bias in Renewable Resource Management and Agent’s Welfare

Marco Persichina

Journal of Interdisciplinary Economics, 2024, vol. 36, issue 1, 79-97

Abstract: This article analyses the effects of myopic and present-biased preferences on the welfare of a naive agent when he/she is engaged in an intertemporal harvesting activity from a stock of renewable resources. The analysis is conducted by also taking into account the nature of present-biased behaviours as phenomena that is derived from a dual system of discounting and of response to short and long-term stimuli. In the task of harvesting from a stock of renewable resources, the present biased preferences of a naive agent create a conflict between the long-run benefit of the agent and the short-run desire. Thus, this article demonstrates and argues that in the decision-making, which involves intertemporal choices in renewable resources management, the prevalence of naive behaviour, strongly influenced by the emotional-affective system, can lead to a reduction in the overall utility enjoyed by the individual due to the present bias. JEL: D15, D90, Q20

Keywords: Present bias; naive agent; intertemporal choice; harvesting; dual system discounting (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jinter:v:36:y:2024:i:1:p:79-97

DOI: 10.1177/02601079221088072

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