Instantaneous Gratification and Common Property Resource Games

Abstract

We compute the cooperative and noncooperative solutions for sophisticated agents with Instantaneous-Gratification discounting in infinite horizon, as an extension of the work of Harris & Laibson (2013) and Zou, Chen & Wedge (2014). This research contributes to the existing literature to the extent that we compute multi-agent sophisticated solutions with Instantaneous-Gratification discounting in infinite time, and we place the results of the Instantaneous-Gratification model in context of the management of renewable natural resources. The conclusions withdrawn are applicable for resources of any kind and are suitable for settings where the temporal horizon is unlimited, but the duration of the short-run is large enough to dodge the future. The discussion of this work is useful for policy implementation towards exploitation of renewable natural resources under different forms of ownership.