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The behavioural aspect of green technology investments: A general positive model in the context of heterogeneous agents

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Knobloch, Florian 
Mercure, Jean-Francois 


Studies report that firms do not invest in cost-effective green technologies. While economic barriers can explain parts of the gap, behavioural aspects cause further under-valuation. This could be partly due to systematic deviations of decision-making agents’ perceptions from normative benchmarks, and partly due to their diversity. This paper combines available behavioural knowledge into a simple model of technology adoption. Firms are modelled as heterogeneous agents with different behavioural responses. To quantify the gap, the model simulates their investment decisions from different theoretical perspectives. While relevant parameters are uncertain at the micro-level, using distributed agent perspectives provides a realistic representation of the macro adoption rate. The model is calibrated using audit data for proposed investments in energy efficient electric motors. The inclusion of behavioural factors reduces significantly expected adoption rates: from 81% using a normative optimisation perspective, down to 20% using a behavioural perspective. The effectiveness of various policies is tested.


This is the final version of the article. It first appeared from Elsevier via


green technologies, technology adoption, energy efficiency gap, policy assessment, behavioural science

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Environmental Innovation and Societal Transitions

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Elsevier BV
The authors acknowledge the German National Academic Foundation (FK) and the UK’s Engineering and Physical Sciences Research Council (JFM, fellowship no EP/K007254/1) for financial support.