Managerial Myopia in Mismanaging Renewable Resources: the GONE FISHING Game

Background. Previous research demonstrates three main causes for frequent cases of overexploitation of renewable resources: open access, provision problem and misperception of dynamics. Aim. The aim of this study is to explore the role of a fourth factor for overexploitation of renewable resources, managerial myopia (also referred to as short-termism), as well as to further explore the role of mental models, personal heuristics and group dynamics in mismanagement of renewable resources. Method. For this purpose, the study adopts an experimental design using a System Dynamics (SD)-based Interactive Learning Environment (ILE). The SD-ILE offers sufficient information to the players who are instructed to operate in an oligopoly situation where open access is excluded. Findings. Managerial myopia seems to be a relevant factor in pushing players to develop short-term, over-aggressive policies. The simulations show that optimal or sufficient policies are rejected by players, even when correctly identified, due to perverse incentives generated by short-term accounting goals. A feasible solution for myopic behavior is identified and tested: measuring a larger, balanced set of performance indicators on which managers develop their strategies. Conclusions. The experiment shows that significant improvements in performance and mitigation of myopic behavior are possible. It also demonstrates the relevant role that SD-ILEs may play in studying renewable resource issues and assisting decision-makers in developing and implementing coherent policies.