Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/225491
Authors: 
Strulik, Holger
Werner, Katharina
Year of Publication: 
2020
Series/Report no.: 
cege Discussion Papers No. 408
Abstract: 
We investigate renewable resources when the harvesting agents face self-control problems. Individuals are conceptualized as dual selves. The rational long-run self plans for the infinite future while the affective short-run self desires to maximize instantaneous profits. Depending on the degree of self-control, actual behavior is partly driven by short-run desires. This modeling represents impatience and present bias without causing time inconsistent decision making. In a model of a single harvesting agent (e.g. a fishery), we discuss how self-control problems affect harvesting behavior, resource conservation, and sustainability and discuss policies to curb overuse and potential collapse of the resource due to present-biased harvesting behavior. We then extend the model to several harvesting agents and show how limited self-control exacerbates the common pool problem. Finally, we investigate heterogenous agents and show that there are spillover effects of limited self-control in the sense that perfectly rational agents also behave less conservatively when they interact with agents afflicted by imperfect self-control.
Subjects: 
self-control
temptation
renewable resource use
sustainability
common pool resource management
JEL: 
D60
D90
Q20
Q50
Q58
O40
Document Type: 
Working Paper

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