Recent research has been focused in three areas. First, developing new mechanisms for environmental regulation that utilize the deeper understanding of behavior obtained from experimental and behavioural economics research. Second, and related, is the inquiry into behavioral aspects of the provision of public goods which range from contributions to environmental and other organizations to voting behavior that can affect the distribution of benefits and costs. This research has revealed that people are not selfish as economic theory supposes, but rather engage in reciprocity wherein if others conform to social norms of good behavior, that good behavior is reinforced, but if others do not, the social norm is abandoned and possible retaliation occurs. Third, extensive research on the design of electric power markets is underway using the experimental laboratory to testbed market diesigns.

The behavioral approach has been incorporated into my and others" teaching through use of AEM`s Laboratory for Experimental Economics and Decision Research. In particular I developed (with David Just) a new course, AEM 414 which allows business students to experience markets in which participants tend to make serious and costly mistakes. The students participate in one laboratory market section per week and are shown their results the next week where the behavioral anomaly is explained and the rational strategy revealed. Exzmples of these anomalies are the winner`s curse, failure to account for regression to the mean, over or underweighting low probabilities in making decisions, etc.