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Identity and the Optimal Exploitation of Renewable Resources

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Abstract

We develop a model wherein the agents set the optimal intertemporal consumption of a renewable resource based on economic and non economic motivations. To this end, we assume that consumers do not only derive utility from the consumption and stock level of a renewable resource but also from the self-image that each agent has with respect to a "green" identity. We show that the incorporation of identity issues into preference structure generates a higher level of valuation for the resource stock and an increase on it. Additionally, we have developed our analysis considering, also, that there are two types of consumers, "green" and "brown". We have shown that when we consider heterogeneity in preferences there is a transfer of utility from "green" consumers to "brown" consumers. This loss of utility could be one of the reasons underlying collective action. This throws up the question as to what extent the pressure exerted by "green" group manages to improve the combined steady situation, increasing the stock level and reducing consumption in the long term.

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