We analyze how habit formation affects optimal environmental taxation, when consumption of a habitual good causes a negative external effect on the environment. In a simple two-period model, we show that optimal taxation is still Pigouvian, where tax rates equal marginal damage in each period....

In our representative sample of Swedish mutual fund investors, those who aresustainability motivated perceive investment choices more difficult than otherinvestors. Of those who are sustainability motivated, 38 percent have neveractively invested in a sustainable fund. Preferences for...

In this paper we develop a theoretical model to clarify the underlying mechanisms that drive individual decision making and responses to behavioral interventions, such as nudges. The contribution of the paper is threefold: First, the model provides a theoretical framework that comprehensively...