Green Lifestyle, Behavioural Dynamics and Social Tipping Points

In a dynamic discrete choice model, we study the conditions under which a society transforms smoothly or abruptly at social tipping points to a sustainable lifestyle with less environmentally harmful consumption. Agents act either selfishly or prosocially, differing in how much they internalise environmental harm. Pro-social behaviour implies reduced consumption but yields a "warm-glow" reward. Choices are shaped by personal and social norms that evolve with aggregate behaviour. We consider also snobbism and exclusivity as well as state-dependent warm-glow, associated with various types of social crowding-out effects. We analyse long-run equilibria and social tipping points associated with equilibria bifurcations. Generally, behavioural changes can be associated with a positive and negative decision feedback. Strong social norms and social interaction generate multiple equilibria and social tipping points with a positive feedback and periodic dynamics with negative feedback. We show that marginal changes of parameters can lead to regime changes at social tipping points and many policy interventions may lead to unintended outcomes. For example, increasing environmental awareness can paradoxically lead to higher consumption and environmental damage due to marginal but also abrupt shifts in lifestyle choices.