Behavioral Energy and Environmental Economics

Key Info

Basic Information

Organizational Unit:
Univ.-Prof. Dr. rer. soc. oec. Reinhard Madlener

Further Information



Traditional economics considers decision makers as ‘optimizers’ who always make rational choices. Using insights from psychology, behavioral economics as a field provides an extensive body of evidence contradicting the notion of the homo economicus and identifying distinct limitations – among others -- on attention, memory, and self-control that systematically have an effect on the choices we make. In this seminar, we will first consider some of these and further biases (e.g., different incentives, bounded rationality and choice architecture, information framing, pro-social and -environmental behavior, and time preferences) leading to deviations from rationality and study recent works that consider situations in the energy and environmental domain. We will examine the literature that delves into how behavioral biases play a role when the decision-making concerns energy use and environmental behavior. Finally, we will discuss how these findings might inform energy and environmental policy.


Compulsory Reading

  • Allcott, H. and S. Mullainathan (2010), Behavior and Energy Policy, Science 327(5970), 1204.
  • Chetty, R. (2015), Behavioral Economics and Public Policy: A Pragmatic Perspective, The American Economic Review, 105(5), 1-33.
  • Weber, E., (2013), Doing the Right Thing Willingly. Using the Insights of Behavioral Decision Research for Better Environmental Decisions, In: The Behavioral Foundations of Public Policy (ed.), Princeton University Press, Princeton, NJ, U.S.A., Ch. 22, 380-397.

Review Books

  • Ariely, D. (2008), Predictably Irrational, HarperCollins, New York, NY, U.S.A..
  • Thaler, R. H. and R. Sunstein Cass (2008), Nudge: Improving Decisions about Health, Wealth, and Happiness, Yale University Press, New York, NY, U.S.A..
  • Wilkinson, N. and M. Klaes (2012), An Introduction to Behavioral Economics (2nd ed.), Palgrave Macmillan, Basingstoke, Hampshire, U.K..
  • Shafir, E. (2013), The Behavioral Foundations of Public Policy (ed.), Princeton University Press, Princeton, NJ, U.S.A..

Method Book

  • Angrist, J. D., and J.-S. Pischke (2009), Most Harmless Econometrics: An Empiricist’s Companion, Princeton University Press, Princeton, NJ, U.S.A..

Seminar Articles

The complete literature list can be found on the RWTHmoodle learning platform.