Alternative models of individual behaviour and implications for environmental policy

Most insights of environmental economics are in line with the standard neoc lassical economic model of rational behaviour, formulated in terms of maxim ization of utility in general, or of profits in particular. The standard th eory of environmental policy is a case in point. However, the maximization hypothesis and its methodological foundation have been criticized on many g rounds related to a lack of either logical or empirical content. Moreover, over the years a great many alternative models of behaviour have been propo sed. Both criticism and alternatives are surveyed here. Attention is devote d to relevant insights fi om the philosophy of science, the notion of metho dological individualism, and other criticism. The alternative behavioural m odels include bounded rationality and 'satisficing', lexicographic preferen ces, habitual behaviour, incommensurability and multicriteria evaluation, a nd various models of behaviour under uncertainty. Major implications of the criticism and alternative models of individual behaviour for environmental policy theory are outlined. (C) 2000 Elsevier Science B.V. All rights rese rved.