Uses of Behavioural Economics for Environmental Economists

Sotiris Georganas, Alina Velias and Phoebe Koundouri ()

No 2524, DEOS Working Papers from Athens University of Economics and Business

Abstract: In this literature review, we critically examine methodologies and insights in behavioural economics, focusing on elicitation methods, preference dynamics, and policy implications. We begin by differentiating between stated and revealed preference techniques used to understand environmental preferences. We highlight innovative methods such as virtual reality (VR) and augmented reality (AR) for their ability to create immersive environments for more accurate data collection. We explore the evolution of preferences over time and across generations, noting significant shifts due to aging, socio-economic changes, and major events like economic crises. We debate the stability of preferences, presenting evidence that suggests variability influenced by numerous factors. We discuss behavioural game theory as a crucial tool for understanding strategic decision-making, combining insights from psychology and economics. At the policy level, we address the growing use of artificial intelligence (AI) and the ethical considerations in behavioural economics, contrasting the individual-focused i-frame and system-focused s-frame approaches. We identify the era of misinformation as a major challenge, necessitating strategies to enhance media literacy and information transparency. We conclude by advocating adaptive, ethically sound approaches in behavioural economics to better address the complex issues facing society.

Keywords: Behavioural economics; experimental economics; environmental economics; game theory; AR; VR; misinformation (search for similar items in EconPapers)
Date: 2025-02-24
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