Skip to main content
SLU publication database (SLUpub)
Report, 2019

Present Bias in Renewable Resources Management Reduces Agent’s Welfare

Persichina, Marco

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.

Published in

MPRA Paper
2019, number: 97986
Publisher: University Library of Munich

    UKÄ Subject classification

    Economics

    Permanent link to this page (URI)

    https://res.slu.se/id/publ/105874