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Title: Stochastic Hyperbolic Discounting: An Application to an Environmental Dynamic Game
Author: Capsi Morales, Luis-Javier
Director: Marín Solano, Jesús
Navas, Jorge
Keywords: Economia ambiental
Anàlisi estocástica
Jocs diferencials
Contaminació atmosfèrica
Tesis de màster
Environmental Economics
Analyse stochastique
Differential games
Atmospheric pollution
Masters theses
Issue Date: 2018
Abstract: We study the infinite horizon emissions and stock of pollution choices of time-inconsistent individuals by incorporating the stochastic hyperbolic preferences of Harris and Laibson (2013), later extended by Zou et al. (2014), into the environmental dynamic game pro-posed by Jørgensen et al. (2003) with linear-state structure. We derive analytic solutions for optimal emissions and stock of pollution selections for sophisticated individuals and extend the results with a sensitivity analysis of the stochastic hyperbolic parameters and their impact on the economy. Compared to the results of Jørgensen et al., we find that the stochastic hyperbolic discounting model increases the emissions rates and the stock of pollution, concretely, in the case in which agents are highly impatient.
Note: Treballs Finals del Màster d'Economia, Facultat d'Economia i Empresa, Universitat de Barcelona, Curs: 2017-2018, Tutor: Jesús Marín-Solano ; Jorge Navas
Appears in Collections:Màster Oficial - Economia

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