Equilibrium resource management with altruistic overlapping generations

Ivar Ekeland, Larry Karp and Ussif Sumaila

Journal of Environmental Economics and Management, 2015, vol. 70, issue C, 1-16

Abstract: We imbed a classic fishery model, where the optimal policy follows a Most Rapid Approach Path to a steady state, into an overlapping generations setting. The current generation discounts future generations׳ utility flows at a rate possibly different from the pure rate of time preference used to discount their own utility flows. The resulting model has non-constant discount rates, leading to time inconsistency. The unique Markov Perfect equilibrium to this model has a striking feature: provided that the current generation has some concern for the not-yet born, the equilibrium policy does not depend on the degree of that concern.

Keywords: Overlapping generations; Time inconsistency; Hyperbolic discounting; Markov perfect; Renewable resources (search for similar items in EconPapers)
JEL-codes: C61 C73 D64 D90 Q01 Q22 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:70:y:2015:i:c:p:1-16

DOI: 10.1016/j.jeem.2014.12.001

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