Hyperbolic discounting exists when a person's marginal rates of time preference decrease as the benefits received move farther and farther into the future. This paper explores whether applying hyperbolic discounting rather than the standard presumption of constant discounting matters for a natural resource policy question. We find that hyperbolic discounting does matter - based on actual time preferences observed in laboratory experiments, the results now justify the policy to protect native cutthroat trout from exotic lake trout in Yellowstone Lake. We find, however, that hyperbolic discounting matters in exactly the same conditions under which the policy decisions are time-inconsistent. © 2003 Elsevier B.V. All rights reserved.
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