@article{Michielsen:151532,
      recid = {151532},
      author = {Michielsen, Thomas},
      title = {Environmental Catastrophes under Time-Inconsistent  Preferences},
      address = {2013-05},
      number = {824-2016-54764},
      series = {CCSD},
      pages = {42},
      year = {2013},
      abstract = {I analyze optimal natural resource use in an  intergenerational model with the risk of a catastrophe.  Each generation maximizes a weighted sum of discounted  utility (positive) and the probability that a catastrophe  will occur at any point in the future (negative). The model  generates time- inconsistency as generations disagree on  the relative weights on utility and catastrophe prevention.  As a consequence, future generations emit too much from the  current generation’s perspective and a dynamic game ensues.  I consider a sequence of models. When the environmental  problem is related to a scarce exhaustible resource, early  generations have an in-incentive to reduce emissions in  Markov equilibrium in order to enhance the ecosystem’s  resilience to future emissions. When the pollutant is  expected to become obsolete in the near future, early  generations may however increase their emissions if this  reduces future emissions. When polluting inputs are  abundant and expected to remain essential, the catastrophe  becomes a self-fulfilling prophecy and the degree of  concern for catastrophe prevention has limited or even no  effect on equilibrium behaviour.},
      url = {http://ageconsearch.umn.edu/record/151532},
      doi = {https://doi.org/10.22004/ag.econ.151532},
}