Optimal conservation policy under imperfect intergenerational altruism

Di Corato L

doi:10.1016/j.jfe.2012.02.002

Sammanfattning

In this paper we study the optimal conversion policy set by a society composed of a sequence of non-overlapping imperfectly altruistic generations. We show that society can be equivalently viewed as a sequence of hyperbolic discounting agents. Under uncertainty about future pay-offs we determine, as solution to an intergenerational non-cooperative dynamic game, the optimal timing of irreversible conversion. We show that under both naive and sophisticated beliefs about future time-inconsistency, the option value attached to the conversion decision is eroded and earlier conversion occurs. This determines a drastic bias toward the current generation gratification, which affects the intergenerational allocation of benefits and costs from deforestation.

Nyckelord

Real options; Intergenerational imperfect altruism; Hyperbolic discounting; Timing game.

Publicerad i

Journal of Forest Economics
2012, volym: 18, nummer: 3, sidor: 194-206
Utgivare: Elsevier

SLU författare

Di Corato, Luca
- Institutionen för ekonomi, Sveriges lantbruksuniversitet

Globala målen (SDG)

SDG15 Ekosystem och biologisk mångfald

UKÄ forskningsämne

Nationalekonomi

Publikationens identifierare

DOI: https://doi.org/10.1016/j.jfe.2012.02.002

Permanent länk till denna sida (URI)

https://res.slu.se/id/publ/39511