Überblick Forschung / Research

Environmental and resource economics

The economics of sustainable development

Based on theoretical concepts of sustainability, the structure of indicators of sustainable development is elaborated. The indicators make allowance for the existence of "critical natural capital".

Cooperative solutions to international environmental problems

In the light of negative environmental externalities economic activities in the non-cooperative Nash equilibrium are too high from a global point of view. However, due to the omnipresent free-rider incentive, cooperative solutions prove difficult to be obtained and sustained. The project analyses in a polit-economic and game theoretical framework the conditions under which cooperative agreements are possible and suggest measures to improve upon the present situation.

Economic aspects of biodiversity conservation

The problem of land development for productive purposes and its effects on biodiversity by reducing habitats is analysed. The dependence of biodiversity on "virgin land" is elaborated on the basis of natural growth patterns employed in the theory of renewable natural resources.

The politcal economy of environmental regulation

Economists have persistently argued that market-based instruments are better suited than command and control instruments to achieve cost-effective pollution abatement targets. This wisdom, though commonly known by now, however, has not be translated into actual environmental policy in most countries. To the contrary, historical evidence suggests that with some rare exceptions command and control type of regulations are still the predominant instruments world wide. This is not only true with respect to national environmental policy, but is also reflected by most international environmental agreements (IEAs) where emission reductions are frequently specified as (inefficient) uniform emission reduction quotas. Moreover, one can frequently observe that the abatement level which is envisaged by governments is below what would be required from a cost-benefit analysis. The project tries to explain this divergence between scientific recommendations and actual policy taking a public choice approach.

Monetarisation of environmental damage

The monetarisation of environmental damage is a necessary requirement for using environmental policy instruments to internalize externalities. Internalization is often demanded in the political discussion. Further applications of valuation methods are the quantification of "green net national product", eco-controlling, cost benefit analysis of environmentally relevant projects and the elaboration of a concept of sustanability which is ready to use in political practice.

New institutional economics

The New Institutional Economics is best regarded as an research program which aims at enhancing the significance of neoclassical theory by incorporating institutions into economic analysis. The term institution will be used in two different ways. In one part of the literature it means all sort of legal and non-legal norms, rules, constracts etc. which constrain rational behavior. In the other part it is used to describe organizations which are regarded as a set of norms, put together to fulfill specific purposes. In both meanings institutions serve the task of reducing uncerntainty with regard to the actions of other agents by reducing the set of admissible actions.

Global environmental change: towards an integrated analysis of risk-economic and strategic aspects

Taking strategic and stochastic uncertainty simultaneously into account (risk-strategic approach) the possibility of international co-operation is explained in terms of objective and subjective risk assessment. The interaction of both reveals the importance of country-specific risk preferences for the initiation, the enlargement and the enforcement of co-operation. Depending on the national risk attitudes different kinds of games evolve, e.g. the chicken and stag hunt.
Moreover, given the intensity of risk aversion, the possibility of co-operation (the underlying game) varies by the choice of national policy instrument and technology. Both factors determine the objective risk parameters. To highlight their influence on the success of global risk management a new criterion for international policy assessment and choice is developed: "the criterion of co-operative push".

Law and economics

Product liability and product information-

Accident Prevention by Product Liability Law if Information Provision of Producers and Information Search of Consumers is considered.
We consider the incentive effects of different rules of product liability law when both parties, the producer and the consumer, can take care to reduce accident risks (bilateral accidents). These incentive effects are analyzed given different assumptions about what the producer knows about the care of consumers and the consumer knows about the level of product safety chosen by the producer. In addition, we allow for misperceptions of consumers about product risks. In a dynamic setting the incentive effects of product liability law again are analyzed when reputation of producers can play a role, prices can be signals of product safety and information revelation of producers can be present. Then, in this modified setting we determine whether product liability law works as a substitute or a complement to the activities of producers to improve the information of consumers.