Decision Making under Ecological Regime Shift: An Experimental Economic Approach

Kawata, Yukichika (2011): Decision Making under Ecological Regime Shift: An Experimental Economic Approach.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: homo economicus, unboundedly rational economic agents, regime shift, experimental economics
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C90 - General; D - Microeconomics > D6 - Welfare Economics > D64 - Altruism ; Philanthropy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

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