Arbeitspapier
Time-consistent resource management with regime shifts
We investigate how a resource user who is present-biased manages a renewable resource stock with variable growth that could undergo a reversible regime shift (an abrupt, persistent change in structure and function of the ecosystem supplying the resource). In a discrete-time quasihyperbolic discounting framework with no commitment device, and using only generic utility functions and stock transition with regime shifts, we show that there is a unique, time-consistent stationary Markov-Nash equilibrium extraction policy. Further, we find that the optimal extraction policy is increasing in the resource stock and in the degree of present bias. Overall, our results suggest that for characteristics of ecosystems commonly considered in the literature, presentbiased resource users will increase extraction when faced with regime shifts.
- Sprache
-
Englisch
- Erschienen in
-
Series: Economics Working Paper Series ; No. 19/329
- Klassifikation
-
Wirtschaft
Renewable Resources and Conservation: General
Optimization Techniques; Programming Models; Dynamic Analysis
Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- Thema
-
Renewable resources
Regime shifts
Hyperbolic Discounting
Present bias
Uncertainty
Markov Equilibrium
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Arvaniti, Maria
Krishnamurthy, Chandra K.
Crépin, Anne-Sophie
- Ereignis
-
Veröffentlichung
- (wer)
-
ETH Zurich, CER-ETH - Center of Economic Research
- (wo)
-
Zurich
- (wann)
-
2019
- DOI
-
doi:10.3929/ethz-b-000384710
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:21 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Arvaniti, Maria
- Krishnamurthy, Chandra K.
- Crépin, Anne-Sophie
- ETH Zurich, CER-ETH - Center of Economic Research
Entstanden
- 2019
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