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Review of Environmental Economics and Policy Advance Access originally published online on February 27, 2008
Review of Environmental Economics and Policy 2008 2(1):26-44; doi:10.1093/reep/rem027
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© The Author 2008. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

On Behavioral-Environmental Economics

Jason F. Shogren* and Laura O. Taylor**

* Shogren is the Stroock Professor of Natural Resource Conservation and Management, Department of Economics and Finance, University of Wyoming, and the King Carl XVI Gustaf Professor of Environmental Sciences, Umeå University. E-mail: JRamses@uwyo.edu.
** Taylor is Professor, Department of Agricultural and Resource Economics, and Director, Center for Environmental and Resource Economic Policy, North Carolina State University.

The first 150 words of the full text of this article appear below.


   Introduction
 
This article examines how behavioral economics might advance the science of environmental and resource economics. Behavioral economics explores, catalogues, and rationalizes systematic deviations from rational choice theory. Mullainathan and Thaler (2000) have distilled these deviations or limits on human behavior down to three general categories: bounded rationality, bounded willpower, and bounded self-interest. Based on Simon's (1957) ideas, bounded rationality implies that people do not have unlimited abilities to process all the information needed to make rational choices. Rather, they have inherent behavioral biases and use rules of thumb and shortcuts to make decisions (Mazzotta and Opaluch 1995). Bounded willpower reflects the idea that people lack self-control sometimes—we consume too much, save too little, make rash decisions, procrastinate, and so on. Bounded self-interest captures the other face of Adam Smith—that people can be selfless. People are concerned about other people too (Bergstrom 1989; Smith 1998). They . . . [Full Text of this Article]


   How Can Behavioral Economics Affect Thinking about Environmental Policy?
 
Non-Market Valuation
Choice under Risk
Environmental Conflict and Cooperation
Using Mechanism Design to Control for Market Failure

   When Are Behavioral Failures Relevant?
 
Robustness and Order of Importance
Identifying Relevant Anomalies

   Is Behavioral Failure Market Failure in Disguise?
 

   Do We Have a New Behavioral-Environmental Second-Best Problem?
 

   Conclusions
 

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