Decreasing discount rates and time consistent forest management decisions.

摘要

Many studies in economics have concluded that economic agents implicitly tend to use decreasing discount rates when assessing future expenses or revenues. In a deterministic context this may lead to time inconsistent decisions, as shown in the schematic example that we develop, in which foresters are induced to take a series of wrong decisions. However, recent advances in theoretical economics have shown that in a non-deterministic context, the choice of decreasing discount rates may be rational. We show how the time inconsistency problem may then be overcome and how the classical Faustmann method may be extended. We apply these results on the traditional optimal tree harvest age question.