Exhaustible resource use under endogenous time preference

This paper revisits a classical economic topic of exhaustible resource use on the basis of recent developments in time preference and discount factor models. An analysis of the effects of endogenous time preferences on the dynamic properties of resource use is conducted, contrasting the classical Hotelling results. More specifically, we develop an analytical model that incorporates endogenous time preference into the decision framework of resource consumption. It is expected that the results obtained here not only contribute to the literature of pure economic theory, but also to recent climate policy debates on discounting factors.