Open access
Author
Date
2009-04-09Type
- Journal Article
ETH Bibliography
yes
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Abstract
The author analyzes the optimal investment in environmental protection in a model of non-overlapping hyperbolically discounting agents. He shows that, in the long run and in the absence of a commitment device, society is stuck in a situation where all agents prefer further investments, yet no agent invests. This holds no matter whether agents are aware of the time inconsistency of their preferences. As a consequence, awareness of the time-inconsistency problem poses at best a short run remedy. Moreover, such an outcome may be Pareto inefficient and may explain the weak performance of long-run environmental policies. Show more
Permanent link
https://doi.org/10.3929/ethz-b-000020098Publication status
publishedExternal links
Journal / series
Economics: The Open-Access, Open-Assessment JournalVolume
Pages / Article No.
Publisher
Kiel Institute for the World EconomySubject
Environmental policy; Environmental protection; Hyperbolic discounting; Markov perfect equilibria; Time-inconsistencyRelated publications and datasets
Is new version of: http://hdl.handle.net/20.500.11850/95304
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ETH Bibliography
yes
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