Dynamic externalities are at the core of many long-term environmental problems, from species preservation to climate change mitigation. We use laboratory experiments to compare welfare outcomes and underlying behavior in games with dynamic externalities under two distinct settings: traditionally studied games with infinitely-lived decision makers, and more realistic intergenerational games. We show that if decision makers change across generations, resolving dynamic externalities becomes more challenging for two distinct reasons. First, decision makers' actions may be shortsighted due to their limited incentives to care about the future generations' welfare. Second, even when the incentives are perfectly aligned across generations, increased strategic uncertainty of the intergenerational setting may lead to an increased inconsistency of * This research was supported by the University of Hawaii College of Social Sciences research grant and the Grant-in-Aid for Scientific Research on Priority Areas from the Ministry of Education, Science and Culture of Japan. We would like to thank the Editor, two anonymous referees, Timothy Halliday, Emmanuel Vespa, Alistair Wilson, and participants of the Economic Science Association meetings for many useful comments and suggestions.

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