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Preservation and Endogenous Uncertain Future Preferences

Alain Ayong Le Kama ()

Working Papers from Chaire Economie du climat

Abstract: We extend the Beltratti, Chichilnisky and Heal’s (1993) and (1998) continuoustime stochastic dynamic framework to analyze the optimal depletion of an environmental asset whose consumption is irreversible, in the face of an exogenous uncertainty about future preferences. We introduce an endogenous uncertainty about future preferences. The idea is that the ability of the future generations to change their preferences will depend on the state of the asset. More precisely, we assume that future generations may have a probability to change their preferences all the higher since the stock of the resource becomes low. We describe within this model more clearly the behavior of the central planner facing this type of uncertainty.

Keywords: preservation of natural resources; uncertainty; preferences (search for similar items in EconPapers)
JEL-codes: O4 Q2 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2012-02
New Economics Papers: this item is included in nep-dge, nep-env and nep-res
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Citations: View citations in EconPapers (3)

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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... P_2012-04_LeKama.pdf First version, 2012 (application/pdf)

Related works:
Journal Article: Preservation and exogenous uncertain future preferences (2001) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cec:wpaper:1204

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