Social Dilemmas, Time Preferences andTechnology Adoption in a Commons Problem

Agents interacting on a body of water choose between technologiesto catch …sh. One is harmless to the resource, as it allows full recovery;the other yields high immediate catches, but low(er) future catches.Strategic interaction in one ‘objective’resource game may induceseveral ‘subjective’ games in the class of social dilemmas. Whichunique ‘subjective’game is actually played depends crucially on howthe agents discount their future payo¤s. We examine equilibrium be-havior and its consequences on sustainability of the common-pool re-source system under exponential and hyperbolic discounting.A su¢ cient degree of patience on behalf of the agents may leadto equilibrium behavior averting exhaustion of the resource, thoughfull restraint (both agents choosing the ecologically or environmentallysound technology) is not necessarily achieved. Furthermore, if thedegree of patience between agents is su¢ ciently dissimilar, the morepatient is exploited by the less patient one in equilibrium.We demonstrate the generalizability of our approach developedthroughout the paper. We provide recommendations to reduce theenormous complexity surrounding the general cases.