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Preservation and Endogenous Uncertain Future Preferences

  • Alain Ayong Le Kama

    ()

    (Université Paris-Ouest Nanterre La Défense, Chaire Economie du Climat)

We extend the Beltratti, Chichilnisky and Heal’s (1993) and (1998) continuoustime stochastic dynamic framework to analyze the optimal depletion of an environmental asset whose consumption is irreversible, in the face of an exogenous uncertainty about future preferences. We introduce an endogenous uncertainty about future preferences. The idea is that the ability of the future generations to change their preferences will depend on the state of the asset. More precisely, we assume that future generations may have a probability to change their preferences all the higher since the stock of the resource becomes low. We describe within this model more clearly the behavior of the central planner facing this type of uncertainty.

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File URL: http://ns212578.ovh.net/RePEc/cec/wpaper/12-02_WP_2012-04_LeKama.pdf
File Function: First version, 2012
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Paper provided by Chaire Economie du Climat in its series Working Papers with number 1204.

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Length: 22 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:cec:wpaper:1204
Contact details of provider: Web page: http://ns212578.ovh.net

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  1. Alain Ayong Le Kama, 2012. "Preservation and Endogenous Uncertain Future Preferences," Working Papers 1204, Chaire Economie du Climat.
  2. Alain Ayong Le Kama & Katheline Schubert, 2004. "Growth, Environment and Uncertain Future Preferences," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00267891, HAL.
  3. Epstein, Larry G., 1987. "A simple dynamic general equilibrium model," Journal of Economic Theory, Elsevier, vol. 41(1), pages 68-95, February.
  4. Chichilnisky, Graciela & Beltratti, Andrea & Heal, Geoffrey, 1998. "Uncertain future preferences and conservation," MPRA Paper 7912, University Library of Munich, Germany.
  5. Maurice Obstfeld, 1989. "Intertemporal Dependence, Impatience, and Dynamics," NBER Working Papers 3028, National Bureau of Economic Research, Inc.
  6. repec:hal:journl:halshs-00206326 is not listed on IDEAS
  7. Alain Ayong Le Kama & Katheline Schubert, 2007. "A note on the consequences of an endogenous discounting depending on the environmental quality," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00206326, HAL.
  8. Maria Cunha-E-Sá & Clara Costa-Duarte, 2000. "Endogenous Future Preferences and Conservation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 253-262, June.
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