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Behavioral economics and climate change policy

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  • Gowdy, John M.

Abstract

The policy recommendations of most economists are based on the rational actor model. The emphasis is on achieving efficient allocation by insuring that property rights are completely assigned and that market failures are corrected. This paper takes the position that so-called behavioral "anomalies" are central to human decision-making and, therefore, should be the starting point for effective economic policies. This contention is supported by game theory experiments involving humans and closely related primates. This research suggests that the standard economic approach to climate change policy, with its focus on narrowly rational, self-regarding responses to monetary incentives, is seriously flawed.

Suggested Citation

  • Gowdy, John M., 2008. "Behavioral economics and climate change policy," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 632-644, December.
  • Handle: RePEc:eee:jeborg:v:68:y:2008:i:3-4:p:632-644
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    More about this item

    Keywords

    Behavioral economics Climate change Cooperative behavior Generalized Darwinism Neuroeconomics Rational actor model;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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