Present Bias in Renewable Resources Management Reduces Agent’s Welfare

Marco Persichina

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses the effects of myopic and present-biased preferences on the welfare of a naive agent when she is engaged in an intertemporal harvesting activity from a stock of renewable resources. The analysis is conducted by taking into account also the nature of present-biased behaviors as phenomena that is derived from a dual system of discounting and of response to short and long-term stimuli. In the task of harvesting from a stock of renewable resources, the present biased preferences of a naive agent create a conflict between the long run benefit of the agent and the short run desire. Thus, this paper demonstrates and argues that in the decision-making, which involves intertemporal choices in renewable resources management, the prevalence of naive behavior, strongly influenced by the emotional-affective system, can lead to a reduction in the overall utility enjoyed by the individual due to the present bias.

Keywords: Present bias; naive agent; intertemporal choice; harvesting; 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)
Date: 2019, Revised 2019-12-10
New Economics Papers: this item is included in nep-cbe, nep-env and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:97986

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