Decision Making under Ecological Regime Shift: An Experimental Economic Approach

Yukichika Kawata

MPRA Paper from University Library of Munich, Germany

Abstract: Environmental economics postulates the assumption of homo economicus and presumes that externality occurs as a result of the rational economic activities of economic agents. This paper examines this assumption using an experimental economic approach in the context of regime shift, which has been receiving increasing attention. We observe that when externality does not exist, economic agents (subjects of experimemt) act economically rationally, but when externality exists, economic agents avoid the risk of a regime shift that would have negative consequences for others. Our results suggest that environmental economics may have to reconsider the assumption of homo economicus.

Keywords: homo economicus; unboundedly rational economic agents; regime shift; experimental economics (search for similar items in EconPapers)
JEL-codes: C90 D64 Q57 (search for similar items in EconPapers)
Date: 2011-04-01
New Economics Papers: this item is included in nep-agr, nep-cbe, nep-env, nep-evo, nep-exp and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:30016

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