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http://hdl.handle.net/10419/53245
  
Title:Optimal conservation policy under imperfect intergenerational altruism PDF Logo
Authors:Di Corato, Luca
Issue Date:2011
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Climate Change and Sustainable Development 89.2011
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 näive 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.
Subjects:Imperfect Altruism
Real Options
Hyperbolic Discounting
Time Inconsistency
Natural Resources Management
JEL:D81
C70
Q23
Q58
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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