TY - JOUR
T1 - Policy instruments for evolution of bounded rationality: Application to climate-energy problems
AU - Nannen, V.
AU - van den Bergh, J.C.J.M.
PY - 2010
Y1 - 2010
N2 - We demonstrate how an evolutionary agent-based model can be used to evaluate climate policies that take the heterogeneity of strategies of individual agents into account. An essential feature of the model is that the fitness of an economic strategy is determined by the relative welfare of the associated agent as compared to its immediate neighbors in a social network. This enables the study of policies that affect relative positions of individuals. We formulate two innovative climate policies, namely a prize, altering directly relative welfare, and advertisement, which influences the social network of interactions. The policies are illustrated using a simple model of global warming where a resource with a negative environmental impact-fossil energy-can be replaced by an environmentally neutral yet less cost-effective alternative, namely renewable energy. It is shown that the general approach enlarges the scope of economic policy analysis. © 2009 Elsevier Inc. All rights reserved.
AB - We demonstrate how an evolutionary agent-based model can be used to evaluate climate policies that take the heterogeneity of strategies of individual agents into account. An essential feature of the model is that the fitness of an economic strategy is determined by the relative welfare of the associated agent as compared to its immediate neighbors in a social network. This enables the study of policies that affect relative positions of individuals. We formulate two innovative climate policies, namely a prize, altering directly relative welfare, and advertisement, which influences the social network of interactions. The policies are illustrated using a simple model of global warming where a resource with a negative environmental impact-fossil energy-can be replaced by an environmentally neutral yet less cost-effective alternative, namely renewable energy. It is shown that the general approach enlarges the scope of economic policy analysis. © 2009 Elsevier Inc. All rights reserved.
U2 - 10.1016/j.techfore.2009.05.003
DO - 10.1016/j.techfore.2009.05.003
M3 - Article
SN - 0040-1625
VL - 77
SP - 76
EP - 93
JO - Technological Forecasting and Social Change
JF - Technological Forecasting and Social Change
IS - 1
ER -