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on Evolutionary Economics |
| By: | Simone Borghesi (University of Siena); Angelo Antoci (University of Sassari); Marcello Galeotti (University of Florence) |
| Abstract: | This paper analyses the effects on economic agents' behaviour of an innovative environmental protection mechanism that the Public Administration of a tourist region may adopt to attract visitors while protecting the environment. On the one hand, the Public Administration sells to the tourists an environmental call option that gives them the possibility of being (partially or totally) reimbursed if the environmental quality in the region turns out to be below a given threshold level. On the other hand, it offers the firms that adopt an innovative, non-polluting technology an environmental put option that allows them to get a reimbursement for the additional costs imposed by the new technology if the environmental quality is above the threshold level. The aim of the paper is to study the dynamics that arise with this financial mechanism from the interaction between the economic agents and the Public Administration in an evolutionary game context. |
| Keywords: | Environmental Bonds, Call and Put Options, Technological Innovation, Evolutionary Dynamics |
| JEL: | C73 D62 G10 O30 Q28 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.90&r=evo |
| By: | Dietrich Franz; List Christian (METEOR) |
| Abstract: | According to standard rational choice theory, as commonly used in political science and economics, an agent''s fundamental preferences are exogenously fixed, and any preference change over decision options is due to Bayesian information learning. Although elegant and parsimonious, this model fails to account for preference change driven by experiences or psychological changes distinct from information learning. We develop a model of non-informational preference change.Alternatives are modelled as points in some multidimensional space, only some of whose dimensions play a role in shaping the agent''s preferences.Any change in these `motivationally salient'' dimensions can change the agent''s preferences. How it does so is described by a new representation theorem. Our model not only captures a wide range of frequently observed phenomena, but also generalizes some standard representations of preferences in political science and economics. |
| Keywords: | mathematical economics; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2009015&r=evo |
| By: | Gharad Bryan (Yale University); Dean Karlan (Economic Growth Center,Yale University); Scott Nelson (Yale University) |
| Abstract: | We review the theoretical and empirical literature on commitment devices.A commitment device is any arrangement, entered into by an individual, with the aim of making it easier to fulfill his or her own future plans. We argue that there is growing empirical evidence supporting the proposition that people demand commitment devices and that these devices can change behavior. We highlight the importance of further research exploring soft commitment – those involving only psychological costs – and the welfare consequences of hard commitments – those involving actual costs – especially in the presence of bounded rationality. |
| Keywords: | consumer/household economics, institutional and behavioral economics |
| JEL: | D14 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:980&r=evo |