Environmental and Resource Management under Myopia

Tomoki Fujii

Development Economics Working Papers from East Asian Bureau of Economic Research

Abstract: Myopia is important in environmental and resource management problems because they often involve inter temporal decisions over a long time horizon. We present a parsimonious extension of a standard dynamic programming equation in a continuous time and continuous state setting, which enables rich description of myopic behavior. In our model, the process of planning future controls and choosing current controls are clearly distinguished. We illustrate the behavior of various types of myopic agents with a simple example of non-renewable resource extraction, and discuss the policy relevance of the expiry of extraction permits to resource management under myopia.

Keywords: non-constant discounting; resource management; myopia; time-consistency; observational equivalence (search for similar items in EconPapers)
JEL-codes: C61 Q30 Q50 (search for similar items in EconPapers)
Date: 2006-01
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Working Paper: Environmental and Resource Management under Myopia (2008)
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