Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these...

Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these...

Across the globe climate policy is shifting away from a carbon price towards investment subsidies, such as grants, interest-subsidised loans or guarantees. This increases the risk of inefficient public spending. This paper shows how the main market imperfections related to the emission...

This paper combines several large-scale surveys with different identification strategies to shed new light on the determinants of cooperative behavior. We provide evidence indicating that the well-being maximizing level of trust is above the income maximizing level. Higher trust is also linked...

The main insight of this paper is that moral behavior does not necessarily alleviate coordination problems or may even worsen them, if individuals possess different degrees of morality. We characterize heterogenous Alger-Weibull morality preferences in a canonical model of voluntary...