Behavioral and Experimental Economics

Summer School Experimental Economics

The Behavioral and Experimental Economics group has an influential position in this field in the Netherlands and Europe. CREED, the Amsterdam-based group, focuses particularly on three main projects: economics of political decision making; bounded rationality and institutions and experimental economics. The research of the Rotterdam-based group focuses on two broad themes: decision under risk and uncertainty and intertemporal choice.

Cooperative Behavior, Strategic Interaction and Complex Systems

This research group focuses on: (non-)cooperative game theory; nonlinear dynamics and complex systems; bounded rationality, learning and heterogenous expectations; dynamic models of collective behavior and social networks & dynamic optimization.

Econometrics and Operations Research

Research themes: time series econometrics, panel data, Bayesian econometrics, applied econometrics and econometric methodology. Applications can be found in areas as diverse as monetary economics, labor economics, marketing and asset pricing. Some fellows in this group focus on operations research.

Finance

The Finance group at TI spans many of the core fields in finance: asset pricing, corporate finance, financial econometrics, market microstructure, and financial institutions.

Labor, Health, Education and Development

At TI, a large group of fellows works in different areas of labour, health, education and development.

Macroeconomics and International Economics

Fellows in the Macroeconomics and International Economics group carry out research on growth, innovation, international trade and factor mobility, the role of economic geography, banking and monetary economics, and fiscal policy.

Organizations and Markets

The Organizations and Markets (OM) group spans many areas in (applied) microeconomics, including the economics of organizations, industrial organization, entrepreneurship, innovation, and auctions.

Spatial, Transport and Environmental Economics

The STEE group addresses four themes: urban and regional dynamics, land use, transportation, and environment and resources. Many fellows combine policy research with fundamental research.

Author(s)
Email
c.a.a.m.withagen@vu.nl; f.vander.ploeg@vu.nl
Journal
Review of Environmental Economics and Policy, 2015, 9(2), 285-303

This article examines the possible adverse effects of well-intended climate policies, an outcome known as the Green Paradox. A weak Green Paradox arises if the announcement of a future carbon tax or a sufficiently fast rising carbon tax encourages fossil fuel owners to extract reserves more aggressively, thus exacerbating global warming. We argue that such policies may also encourage more fossil fuel to be locked in the crust of the earth, which can offset the adverse effects of the weak Green Paradox. We show that a subsidy on clean renewables may have similar weak Green Paradox effects. Green welfare (the converse of environmental damages) declines (i.e., the strong Green Paradox) if the beneficial climate effects of locking up more fossil fuel do not outweigh the short-run weak Green Paradox effects. Neither the weak nor the strong Green Paradox occurs for the first-best Pigouvian carbon tax. We also discuss dirty backstops, spatial carbon leakage, and green innovation.

To read the article click here.