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Optimal Conservation Policy Under Imperfect Intergenerational Altruism

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  • Di Corato, Luca

Abstract

In this paper we study the optimal forest conservation policy by a hyperbolically discounting society. Society comprises a series of non-overlapping imperfectly altruistic generations each represented by its own government. Under uncertainty about future pay-offs we determine, as solution of an intergenerational dynamic game, the optimal timing of irreversible harvest. Earlier harvest occurs and the option value attached to the forest clearing decision is eroded under both the assumptions of naïve and sophisticated belief about future time-preferences. This results in a bias toward the current generation gratification which affects the intergenerational allocation of benefits and costs from harvesting and conserving a natural forest.

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  • Di Corato, Luca, 2011. "Optimal Conservation Policy Under Imperfect Intergenerational Altruism," Climate Change and Sustainable Development 120022, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:120022
    DOI: 10.22004/ag.econ.120022
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    Cited by:

    1. Luca Corato, 2016. "Investment stimuli under government present-biased time preferences," Journal of Economics, Springer, vol. 119(2), pages 101-111, October.
    2. Luca Di Corato, 2018. "Rural land development under hyperbolic discounting: a real option approach," Letters in Spatial and Resource Sciences, Springer, vol. 11(2), pages 167-182, July.
    3. Agah R. Turan, 2019. "Intentional time inconsistency," Theory and Decision, Springer, vol. 86(1), pages 41-64, February.

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    More about this item

    Keywords

    Research Methods/ Statistical Methods;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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