Present Bias in Renewable Resources Management Reduces Agent’s Welfare
MPRA Paper from University Library of Munich, Germany
This study investigates the effects generated by myopic and present-biased preferences in the context of resource harvesting, specifically on the impact that the present bias has on the agent’s welfare when the agent is engaged in an intertemporal harvesting activity from a stock of renewable resources. The harvesting activity, in this context, poses a conflict between the long-run benefit of the agent and the short-run desire. The paper assumes there is evidence of the existence of a dual system of response to short and long-term stimuli. Thus, the study shows and argues that in the decision-making that involves intertemporal choices in renewable resources management, the naive behavior, strongly influenced by the emotional-affective system, leads to a reduction in the lifetime utility enjoyed by the individual because of the present bias.
Keywords: Present bias; naive agent; intertemporal resource management; dual system discounting; agent’s welfare; instant utility. (search for similar items in EconPapers)
JEL-codes: D03 D90 Q20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-env and nep-upt
Date: 2016-07-20, Revised 2017-11-30
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:86697
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