Group inefficiency in a common property resource game with asymmetric players

•Cooperative solutions are studied in a dynamic game with asymmetric discounting.•Time-consistent cooperative solutions can be group inefficient.•Joint payments for all players can be higher if cooperation is forbidden.•Noncooperative equilibria can be time inconsistent if cooperation is allowed.

If the joint preferences of asymmetric players having different discount rates are represented by the sum of intertemporal utilities, they become time-inconsistent. It is shown how time-consistent solutions for this problem can be strongly inefficient: the sum of payoffs can be higher if cooperation or coordination is forbidden than if it is allowed.