How do individuals behave in the intergenerational sustainability dilemma? A strategy method experiment

Mostafa Shahen, Koji Kotani and Tatsuyoshi Saijo ()

No SDES-2020-1, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: The intergenerational sustainability dilemma (ISD) is a situation where the current generation chooses to maximize (sacrifice) its own benefits without (for) considering future generations, compromising (maintaining) intergenerational sustainability (IS) (Kamijo et al., 2017, Shahrier et al., 2017b). Despite its importance, little is known about how individuals behave under the ISD and affect IS.We design a one-person ISD game (ISDG) with a strategy method in which a queue of individuals is organized as a generational sequence. Each individual is asked to choose, in 36 situations, either (i) an unsustainable option that yields a payoff, X, at an irreversible cost to future generations, D, or (ii) a sustainable option that yields a payoff, (X - D), that imposes no cost on future generations; in each situation, the histories of previous generations’ choices and the payoff structures of X & D are varied. As a potential resolution for the ISD, we institute a future ahead and back (FAB) mechanism, whereby each individual is asked, first, to take the position of the next generation and request what she wants the current generation to choose and, second, to make the actual decision from the original position. Our results show that individuals are likely to choose the unsustainable option when the proportion of previous generations that chose the unsustainable option is high or when X/D (the IS index) is low. However, the FAB treatment is effective at preventing individuals from choosing the unsustainable option even in such situations. Overall, the results suggest that some new institutions, such as FAB mechanisms, which induce people to take the standpoint of future generations, may be necessary to avoid intergenerational unsustainability, especially when IS default risk becomes high.

Keywords: Intergenerational sustainability dilemma; future ahead and back mechanism; intergenerational sustainability index (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020-05, Revised 2020-05
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published in SDE Series, May 2020, pages 1-41

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2020-1

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