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Present Bias in Renewable Resource Management and Agent’s Welfare

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  • Marco Persichina

Abstract

This article analyses the effects of myopic and present-biased preferences on the welfare of a naive agent when he/she is engaged in an intertemporal harvesting activity from a stock of renewable resources. The analysis is conducted by also taking into account the nature of present-biased behaviours 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 article demonstrates and argues that in the decision-making, which involves intertemporal choices in renewable resources management, the prevalence of naive behaviour, 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. JEL: D15, D90, Q20

Suggested Citation

  • Marco Persichina, 2024. "Present Bias in Renewable Resource Management and Agent’s Welfare," Journal of Interdisciplinary Economics, , vol. 36(1), pages 79-97, January.
    • Handle: RePEc:sae:jinter:v:36:y:2024:i:1:p:79-97
    DOI: 10.1177/02601079221088072
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    More about this item

    Keywords

    Present bias; naive agent; intertemporal choice; harvesting; dual system discounting;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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