Publication Type
Journal Article
Version
acceptedVersion
Publication Date
9-2013
Abstract
We develop a parsimonious model of myopia with an infinitesimal period of commitment as an extension to a standard dynamic optimization in a continuous-time environment. We clearly distinguish the processes of planning future controls and choosing the current control, which makes the model both analytically and numerically convenient. In its application to a simple non-renewable resource extraction problem, we show that whether the terminal time is free or fixed determines the appropriateness of the approximation to myopic agents by constant discounting. We also show that the expiry of extraction permits may be useful in the presence of myopia.
Discipline
Econometrics | Public Economics
Research Areas
Applied Microeconomics
Publication
Mathematical Social Sciences
Volume
66
Issue
2
First Page
95
Last Page
104
ISSN
0165-4896
Identifier
10.1016/j.mathsocsci.2013.02.004
Publisher
Elsevier
Citation
FUJII, Tomoki.
Modeling myopia: Application to non-renewable resource extraction. (2013). Mathematical Social Sciences. 66, (2), 95-104.
Available at: https://ink.library.smu.edu.sg/soe_research/1522
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.mathsocsci.2013.02.004