Economic Incentives in the Purchase and Use of Energy-Using Products: Past Practices and New Developments

摘要

This paper introduces the behavioral foundations of investment decision-making from the eyes of an economist, and relates these foundations to the purchase and use of energy saving technologies. It first examines the characteristics of energy technology choices and presents the conventional explanations of market failure in their consumption. It then presents a simple exposition of economic cost-effectiveness. Following this, new developments in the economics literature are related to this simple exposition, and changes or enhancements to the conventional conclusions that these theories offer are summarized.