No Man is an Island: Social Coordination and the Environment
Department of Economics, University of Oslo, Memorandum No 07/2019 June 2019
25 Pages Posted: 21 Jun 2019
Date Written: June 17, 2019
Abstract
Humans are fundamentally social. Social activities require coordination, which may yield multiple equilibria in the form of stable, self-reinforcing patterns of herd behavior. Since environmental impacts can differ substantially between alternative equilibria, such self-reinforcing behaviors may, from an environmental perspective, be viewed as representing virtuous or vicious cycles. Environmental policies can help break the self-fulfilling expectations of vicious cycles, tipping the economy to more environment-friendly equilibria.
Keywords: environmental policy, multiple equilibria, social interaction, tipping points
JEL Classification: D10, D62, D91, Q01, Q50, Q58
Suggested Citation: Suggested Citation