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The economic psychology of climate change: An experimental study on risk preferences and cooperation

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  • Gruener, Sven

Abstract

Climate change is one of the main challenges of our time. This paper examines how anticipated consequences of climate change influence individual and collective decision-making. Using a controlled information intervention experiment, we find that farmers in Germany – who are likely to be affected by climate change – increase their willingness to invest in risky assets but their cooperation behavior remains largely unaffected. In contrast to previous experiments on information provision, our results suggest that emotions cannot explain subjects’ behaviors. We argue that reminding of anticipated consequences of climate change can reactivate individuals’ memories that actions are necessary and, in turn, overcome inertia (JEL C91, C92, D01, D81, D91, H41, Q12, Q54).

Suggested Citation

  • Gruener, Sven, 2022. "The economic psychology of climate change: An experimental study on risk preferences and cooperation," OSF Preprints jq57n, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:jq57n
    DOI: 10.31219/osf.io/jq57n
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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