Abstract
The rise of behavioral economics has important implications for the study of government regulation. Above all, the endogeneity of preferences offers a large area for positive work. Some environmental outcomes can be explained by status quo bias and the endowment effect. These phenomena help account for the asymmetry between old and new risks and the public antipathy toward strategies that create incentives to decrease use of automobiles. Both private and public behavior in the environmental context are an outgrowth of the fact that environmental preferences are endogenous to available opportunities, to shifting social norms, and to past acts of consumption.
Highlights
How can we explain the rise of environmental law? By what criteria should we evaluate regulation of pollution? Why do some cities require recycling? Should we tax waste disposal instead? Should we subsidize mass transit in order to reduce automobile pollution, or should we regulate cars? Why do we do one rather than another?
Some environmental outcomes can probably be explained by status quo bias and the endowment effect
These phenomena help account for the asymmetry between old and new risks and the public antipathy toward strategies that create incentives to decrease use of automobiles
Summary
Cass R. Sunstein, Endogenous Preferences, Environmental Law (Program in Law & Economics Working Paper No 14, 1993). This article was downloaded from Harvard University’s DASH repository, and is made available under the terms and conditions applicable to Other Posted Material, as set forth at http:// nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-ofuse#LAA
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