Dynamic Games of Common-Property Resource Exploitation When Self-Image Matters
34 Pages Posted: 23 Oct 2019
Date Written: 2019
Abstract
The purpose of this paper is to model the influence of Kantian moral scruples in a dynamic environment. Our objectives are two-fold. Firstly, we investigate how a Nash equilibrium among agents who have moral scruples may ensure that the exploitation of a common property renewable resource is Pareto efficient at every point of time. Secondly, we outline a prototype model that shows, in an overlapping generation framework, how a community's sense of morality may evolve over time and identifies conditions under which the community may reach a steady state level of morality in which everyone is perfectly Kantian.
Keywords: tragedy of the commons, dynamic games, Nash equilibrium, self-image, categorical imperative
JEL Classification: C710, D620, D710
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