Working Paper BETA #2020-04

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Title : To seed, or not to seed

Author(s) : David DESMARCHELIER , Alexandre MAYOL

Abstract : Within this paper, we develop a simple overlapping generations model (OLG) with a renewable resource (forest) in the spirit of Koskela et al. (2002). Seeding activities (more broadly, forestry) are introduced in the form of a domestic production as well as a joy-of-giving bequest motive regarding the resource. In this simple framework, we show that altruism always guarantee a positive resource level at the steady state. However, studying the dynamics, we point out that the stability of the steady state crucial depends upon both altruism and forestry productivity: under a low forestry productivity, the steady state is always stable while, under a high forestry productivity, two period-cycles (flip bifurcation) can emerge near the steady state if and only if altruism is sufficiently high which rises the question of resource preservation and leads to the conclusion that the road to hell is paved with good intentions.

Key-words : Renewable resource, OLG model, altruism, flip bifurcation.

JEL Classification : E32, O44.