Experimental Economics: Applications to Environmental Policy

Andrew Reeson and Karel Nolles ()
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Karel Nolles: CSIRO Sustainable Ecosystems, Australia

No 2009-03, Socio-Economics and the Environment in Discussion (SEED) Working Paper Series from CSIRO Sustainable Ecosystems

Abstract: Incentives, regulations and other policy interventions intended to promote sustainability work through influencing human behaviour. There is therefore much to be gained from a thorough understanding of exactly how various policy interventions relate to the decision-making process. Experimental economics, and the closely related fields of behavioural economics and behavioural finance, apply an empirical approach to study how people act when faced with a range of economic and social scenarios. The experimental approach was pioneered by Vernon Smith and Daniel Kahneman and others, building on early studies by Chamberlin (1948). In recognition of this work, Kahneman and Smith were awarded the 2002 Nobel Prize in Economic Sciences. This paper briefly reviews the applications and methods of experimental economics, relates some key research findings and describes some examples of its use in informing environmental policy.

Keywords: Experimental economics; Behavioral economics; Environmental economics; Environmental markets; Market-based instruments; MBIs (search for similar items in EconPapers)
JEL-codes: C90 Q50 Q58 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-01
New Economics Papers: this item is included in nep-agr, nep-env, nep-evo, nep-exp and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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