Munich Personal RePEc Archive

Other-regarding Preferences and Social Norms in the Intergenerational Transfer of Renewable Resources when Agent has Present-Biased Preferences

Persichina, Marco (2016): Other-regarding Preferences and Social Norms in the Intergenerational Transfer of Renewable Resources when Agent has Present-Biased Preferences.

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Abstract

The paper analyses the effects of the present-bias in terms of reduction of the welfare of future generations in the framework of renewable resources harvesting. In particular, this study queries the behavioral traits that emerge when the agent is present-biased and also in presence of other-regarding preferences toward future generations, which are expressed through the adherence to genuine other-regarding preferences or social norms. This investigation demonstrates that the strategic short-sightedness imposed by the “dictatorship of the present” causes a reduction in the well-being of future generations, despite the existence of strong social preferences. Faced with this problem, this study argues that if the social preferences of the individuals are not left only and exclusively to their own spontaneous behavior, and if these social preferences are also expressed through social norms that prescribe to not reevaluate the harvesting decisions, a mitigation of the effect of present bias on the intergenerational equity can occur.

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