Present Bias in Renewable Resources Management Reduces Agent's Welfare
2024
Persichina, Marco
This article analyses the effects of myopic and present-biased preferences on the welfare of a naive agent when he/she is engaged in an intertemporal harvesting activity from a stock of renewable resources. The analysis is conducted by also taking into account the nature of present-biased behaviours as phenomena that is derived from a dual system of discounting and of response to short and long-term stimuli.In the task of harvesting from a stock of renewable resources, the present biased preferences of a naive agent create a conflict between the long-run benefit of the agent and the short-run desire.Thus, this article demonstrates and argues that in the decision-making, which involves intertemporal choices in renewable resources management, the prevalence of naive behaviour, strongly influenced by the emotional-affective system, can lead to a reduction in the overall utility enjoyed by the individual due to the present bias.
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