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PFS0150
A course on Behaviour Environmental Economics
The course includes a blend of lectures, group discussions, practical exercises, and home-assignments.
Behavioral Economics integrates insights from psychology into economic thinking. It attempts to increase the explanatory power of economic models by incorporating a better understanding of human behavior and its underlying factors. The knowledge provided within this course is important for researchers, future managers, analysts, and consultants and policy makers, because it is about understanding how actually people (customers, competitors, colleagues, and themselves) make decisions regarding the environmental economics, since the neoclassical economics fails to portray the behavior in a realist way. This course introduces the tools and perspective from a behavioral economics perspective and how to use them in environmental economics.
The first day of the course sets fundamentals about behavioral economics via a detailed introduction about the behavioral biases and examples of experiments. The first day also introduces some specific illustrations and real-world examples such as individual consumption and extraction decisions for how the postulated simple rational behavior can differ in reality from expectations. Attention will be drawn to the challenges involved in identifying deviations from basic rationality assumption and "conditioning factors" involved in many contexts.
Second and the third day focusses on laboratory experiments and the third day also includes guest speakers on relevant topics such as conspicuous consumption. Overall, these two days will provide information to students about how they can use laboratory experiments to investigate the environmental economics issues. Prof. Eline van der Heijden’s lecture starts with a short introduction to several types of environmental problems and briefly reviews how some of these environmental social dilemmas have been studied experimentally and discusses some recent contributions, both of lab and field experiments. Then, discussing some specific topics in more detail: cooperation in (dynamic) coordination games, provision of environmental conversation by means of payments for ecosystem services, the role of leadership. Focus is on instruments that can be used to improve coordination and cooperation.
Third day includes a lecture beginning with a short introduction to the concept of Equilibrium under Ambiguity (EUA). Then the lecture proceeds to apply the equilibrium concept to analyze games that simulate the effects of climate change in various choice situations: Mitigation: We will firstly model the ambiguity countries face while coordinating in a manner that would mitigate harmful emissions that cause climate change. Adaptation: Next we will study the effects of ambiguity on individuals deciding whether to invest in infrastructure that will adapt to the harmful effects of climate change, such that they can prevent losses due to climate change catastrophes. Insurance: Finally, alongside mitigation and adaptation mechanisms, we must consider insuring optimally in the face of ambiguous climate change catastrophes that can be viewed as low probability/high impact events.
The fourth day focusses on Framed Field Experiments (FFEs): Since 2000 (Cardenas), a series of FFEs on natural resource use and management in developing countries have been conducted. FFEs have, compared to lab experiments, a realistic task (e.g. harvesting of trees) with a relevant population (e.g. real forest users) and conducted in the participants’ natural environment. The experiments are usually framed as a common pool resource game (CPR), creating a social dilemma between individual collective payoffs. The lecture aims to, first, give a broad overview of FFEs, some typical resource management situations, and possible policies. Second, it will summarize the experimental studies and the main (policy) conclusions that can be drawn from these. Below is the outline of the lecture.
The course starts with a self-study period of course material, continues with an intensive week of lect
Behavioral Economics integrates insights from psychology into economic thinking. It attempts to increase the explanatory power of economic models by incorporating a better understanding of human behavior and its underlying factors. The knowledge provided within this course is important for researchers, future managers, analysts, and consultants and policy makers, because it is about understanding how actually people (customers, competitors, colleagues, and themselves) make decisions regarding the environmental economics, since the neoclassical economics fails to portray the behavior in a realist way. This course introduces the tools and perspective from a behavioral economics perspective and how to use them in environmental economics.
The first day of the course sets fundamentals about behavioral economics via a detailed introduction about the behavioral biases and examples of experiments. The first day also introduces some specific illustrations and real-world examples such as individual consumption and extraction decisions for how the postulated simple rational behavior can differ in reality from expectations. Attention will be drawn to the challenges involved in identifying deviations from basic rationality assumption and "conditioning factors" involved in many contexts.
Second and the third day focusses on laboratory experiments and the third day also includes guest speakers on relevant topics such as conspicuous consumption. Overall, these two days will provide information to students about how they can use laboratory experiments to investigate the environmental economics issues. Prof. Eline van der Heijden’s lecture starts with a short introduction to several types of environmental problems and briefly reviews how some of these environmental social dilemmas have been studied experimentally and discusses some recent contributions, both of lab and field experiments. Then, discussing some specific topics in more detail: cooperation in (dynamic) coordination games, provision of environmental conversation by means of payments for ecosystem services, the role of leadership. Focus is on instruments that can be used to improve coordination and cooperation.
Third day includes a lecture beginning with a short introduction to the concept of Equilibrium under Ambiguity (EUA). Then the lecture proceeds to apply the equilibrium concept to analyze games that simulate the effects of climate change in various choice situations: Mitigation: We will firstly model the ambiguity countries face while coordinating in a manner that would mitigate harmful emissions that cause climate change. Adaptation: Next we will study the effects of ambiguity on individuals deciding whether to invest in infrastructure that will adapt to the harmful effects of climate change, such that they can prevent losses due to climate change catastrophes. Insurance: Finally, alongside mitigation and adaptation mechanisms, we must consider insuring optimally in the face of ambiguous climate change catastrophes that can be viewed as low probability/high impact events.
The fourth day focusses on Framed Field Experiments (FFEs): Since 2000 (Cardenas), a series of FFEs on natural resource use and management in developing countries have been conducted. FFEs have, compared to lab experiments, a realistic task (e.g. harvesting of trees) with a relevant population (e.g. real forest users) and conducted in the participants’ natural environment. The experiments are usually framed as a common pool resource game (CPR), creating a social dilemma between individual collective payoffs. The lecture aims to, first, give a broad overview of FFEs, some typical resource management situations, and possible policies. Second, it will summarize the experimental studies and the main (policy) conclusions that can be drawn from these. Below is the outline of the lecture.
The course starts with a self-study period of course material, continues with an intensive week of lect
Syllabus and other information
Syllabus
PFS0150 A course on Behaviour Environmental Economics, 7.5 Credits
Subjects
EconomyEducation cycle
Postgraduate levelGrading scale
Pass / Failed
Prior knowledge
The course is specifically aimed at PhD students within the field of social sciences in particular economics. Knowledge in basic microeconomics and good knowledge in English is vital to be able to follow the course.While applying for the course, each student will be asked to write a max. 300 words text describing their current work and research interests. The text will be used in selection process and if accepted to allocate the student’s seminar to the related section. This short essay will help the course organizers to understand students’ research and learning interests etc. Note that the accepted students who does not have their own work to present will be asked to select a paper from the reading list to present. This option is especially set for the Master level students to enable them to apply for the course. Capacity is limited to 25 students.
Objectives
The course aims to provide understanding of topics in environmental and resource economics from a behavioural economics perspective. The course aims at an interdisciplinary audience, welcoming students not only from core social sciences but also from management of natural resources, forests being one example. Students will learn how to apply the theory and the methods such as field and laboratory experiments to the environmental issues to discover how individuals actually behave, and how normative theories and frameworks fail to capture the actual behaviour. In more detail the learning outcomes are to gain: - Background about the behavioral economics, relevant theoretical advances, behavioral biases, experimental methods. - General overview of the "non-behavioral economics": existing policy tools, theoretical models in brief. - An in-depth understanding of the adaptation and mitigation strategies under ambiguity using public goods games, weakest-link public goods game and coordination game. - An in-depth understanding of the cooperation in (dynamic) coordination games, auction mechanisms, provision of environmental conversation by means of payments for ecosystem services, technology adaptation subsidies and the role of leadership. Focus will be on instruments that can be used to improve coordination and cooperation. - Framed Field Experiments and resource management situations such as forestry and possible policy conclusions. Learning Outcomes: - After having completed the course, the student should be able to gain skills and knowledge about the following: - Understand the experimental methods and procedures that the behavioral economics employ. - Students will have the knowledge of how to connect behavioral economics and environmental economics. - Students will learn about the essential procedures for laboratory and field experiments related to environmental economics, previous examples and also the results of them. - Students will be able to analyze and describe the related literature i.e., the environmental economics studies using behavioral perspective.Content
The course includes a blend of lectures, group discussions, practical exercises, and home-assignments. Behavioral Economics integrates insights from psychology into economic thinking. It attempts to increase the explanatory power of economic models by incorporating a better understanding of human behavior and its underlying factors. The knowledge provided within this course is important for researchers, future managers, analysts, and consultants and policy makers, because it is about understanding how actually people (customers, competitors, colleagues, and themselves) make decisions regarding the environmental economics, since the neoclassical economics fails to portray the behavior in a realist way. This course introduces the tools and perspective from a behavioral economics perspective and how to use them in environmental economics. The first day of the course sets fundamentals about behavioral economics via a detailed introduction about the behavioral biases and examples of experiments. The first day also introduces some specific illustrations and real-world examples such as individual consumption and extraction decisions for how the postulated simple rational behavior can differ in reality from expectations. Attention will be drawn to the challenges involved in identifying deviations from basic rationality assumption and "conditioning factors" involved in many contexts. Second and the third day focusses on laboratory experiments and the third day also includes guest speakers on relevant topics such as conspicuous consumption. Overall, these two days will provide information to students about how they can use laboratory experiments to investigate the environmental economics issues. Prof. Eline van der Heijden’s lecture starts with a short introduction to several types of environmental problems and briefly reviews how some of these environmental social dilemmas have been studied experimentally and discusses some recent contributions, both of lab and field experiments. Then, discussing some specific topics in more detail: cooperation in (dynamic) coordination games, provision of environmental conversation by means of payments for ecosystem services, the role of leadership. Focus is on instruments that can be used to improve coordination and cooperation. Third day includes a lecture beginning with a short introduction to the concept of Equilibrium under Ambiguity (EUA). Then the lecture proceeds to apply the equilibrium concept to analyze games that simulate the effects of climate change in various choice situations: Mitigation: We will firstly model the ambiguity countries face while coordinating in a manner that would mitigate harmful emissions that cause climate change. Adaptation: Next we will study the effects of ambiguity on individuals deciding whether to invest in infrastructure that will adapt to the harmful effects of climate change, such that they can prevent losses due to climate change catastrophes. Insurance: Finally, alongside mitigation and adaptation mechanisms, we must consider insuring optimally in the face of ambiguous climate change catastrophes that can be viewed as low probability/high impact events. The fourth day focusses on Framed Field Experiments (FFEs): Since 2000 (Cardenas), a series of FFEs on natural resource use and management in developing countries have been conducted. FFEs have, compared to lab experiments, a realistic task (e.g. harvesting of trees) with a relevant population (e.g. real forest users) and conducted in the participants’ natural environment. The experiments are usually framed as a common pool resource game (CPR), creating a social dilemma between individual collective payoffs. The lecture aims to, first, give a broad overview of FFEs, some typical resource management situations, and possible policies. Second, it will summarize the experimental studies and the main (policy) conclusions that can be drawn from these. Below is the outline of the lecture. The course starts with a self-study period of course material, continues with an intensive week of lectAdditional information
The Department of Forest Economics reserves the right to cancel the course if there are not more than 5 students who have applied and is accepted to the course.There is no tuition fee for students, and the course will meet online.
To apply for the course, send your CV (max 2 pages) and also a letter of interest (max. 300 words) giving information about your research interests and current projects. For up-to-date information regarding the course, see https://www.slu.se/BEE2021.
Responsible department
Department of Forest Economics