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Other-regarding Preferences and Social Norms in the Intergenerational Transfer of Renewable Resources when Agent has Present-Biased Preferences

Marco Persichina

MPRA Paper from University Library of Munich, Germany

Abstract: The paper analyses the effects of the present-bias in terms of reduction of the welfare of future generations in the framework of renewable resources harvesting. In particular, this study queries the behavioral traits that emerge when the agent is present-biased and also in presence of other-regarding preferences toward future generations, which are expressed through the adherence to genuine other-regarding preferences or social norms. This investigation demonstrates that the strategic short-sightedness imposed by the “dictatorship of the present” causes a reduction in the well-being of future generations, despite the existence of strong social preferences. Faced with this problem, this study argues that if the social preferences of the individuals are not left only and exclusively to their own spontaneous behavior, and if these social preferences are also expressed through social norms that prescribe to not reevaluate the harvesting decisions, a mitigation of the effect of present bias on the intergenerational equity can occur.

Keywords: Present bias; naive agent; intergenerational resource management; renewable resources; other-regarding preferences; social norms (search for similar items in EconPapers)
JEL-codes: D01 D03 D90 D91 Q20 Q50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
Date: 2016-07-20, Revised 2017-11-30
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