Equilibrium management of fisheries with altruistic overlapping generations
We imbed a classic fishery model, where the optimal policy follows a Most Rapid Approach Path to a steady state, into an overlapping generations setting. The current generation discounts future generationsâ€™ utility flows at a rate possibly different from the pure rate of time preference used to discount their own utility flows. The resulting model has non-constant discount rates, leading totime inconsistency. The unique Markov Perfect equilibrium to this model hasa striking feature: provided that the current generation has some concern forthe not-yet born, the equilibrium policy does not depend on the degree of thatconcern.
|Date of creation:||10 Dec 2011|
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- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
- William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
- David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
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