Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202636 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
Memorandum No. 07/2019
Publisher: 
University of Oslo, Department of Economics, Oslo
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.
Subjects: 
Environmental policy
multiple equilibria
social interaction
tipping points
JEL: 
D10
D62
D91
Q01
Q50
Q58
Document Type: 
Working Paper

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