Behavioural economics experiments

Carlsson and Johansson-Stenman, 2012

how BE can refine and improve environmental policy

human motivation - behaviour is driven by fairness perceptions, social norms and voluntary cooperation

• self-serving bias

social context - people care about self-image

• conspicuous conservation - choose green product for the status it provides

• positional externalities - care about consumption relative to others

do monetary incentives crowd out intrinsic moral motivation? - include crowding effects do not make economic instruments less attractive

cognitive limitations - default bias, present-bias

risk misperception and ambiguity aversion

regulator bias - action bias for political credit

Noussair and van Soest, 2014

experimental evidence shows that humans are not purely self-interested - many exhibit prosocial preferences

top-down government interventions can be counterproductive but crowding out intrinsic motivation

cooperation is more difficult in extractive environments

one-sided auctions - encourage truthful demand revelation

two-sided markets - converge toward competitive equilibrium prices but can face challenges such as market power

lab experiments = highly specific insights into human cooperation and market design but should be used in conjunction with other methods

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