Technology and Time Inconsistency

• 成果类型: Article
• 署名作者: Harstad, Bard
• 署名单位: University of Oslo
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/707024
• 发表日期: 2020
• 页码: 2653-2689
• 关键词: collective dynamic choice; Government policy; MODEL; temptation; utility; game

摘要

Policy makers have time-inconsistent preferences if they fear losing power or are endowed with hyperbolic discount factors. Politicians may thus seek to influence future policy choices, for example, by investing in green technologies that motivate later politicians to act sustainably. I show that optimal investment subsidies are larger for technologies that are strategic complements to future investments, that are further upstream in the supply chain, or that are characterized by longer maturity. Time inconsistency can rationalize subsidies at similar levels as market failures such as externalities can. Furthermore, the two are superadditive: time inconsistency and strategic investments are especially important for long-term policies associated with externalities.