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Green Defaults: Information Presentation and Pro-environmental Behaviour
Abstract
There is inconsistency in many people's choice of electricity. When asked, they say they prefer a ‘green’ (i.e., environmentally friendly) source for this energy. Yet, although green electricity is available in many markets, people do not generally buy it. Why not? Motivated by behavioural decision research, we argue that the format of information presentation drastically affects the choice of electricity. Specifically, we hypothesise that people use the kind of electricity that is offered to them as the default. We present two natural studies and two experiments in the laboratory that support this hypothesis. In the two real-world situations, there was a green default, and most people used it. In the first laboratory experiment, more participants chose the green utility when it was the default than when ‘grey’ electricity was the default. In the second laboratory experiment, participants asked for more money to give up green electricity than they were willing to pay for it. We argue that changing defaults can be used to promote pro-environmental behaviour. Potential policy-making applications of this work are discussed.
... Online privacy policy priorities (Bellman et al., 2001) and retirement investment policy preferences have also been shown to be affected by defaults (Madrian & Shea, 2001). Defaults have also been found to be extremely successful in shaping decision-making in many environments, such as organ donation, voluntary giving, paper recycling, and fossil energy mitigation Pichert & Katsikopoulos, 2008;Altmann & Traxler, 2014;Ebeling & Lotz, 2015;Egebark & Ekström, 2016;Chassot et al., 2017;Liebe et al., 2018). Since default has been successful in so many ways, it stands to reason that it would be successful in the insurance industry as well. ...
... Other reasons for the default settings impact include the chance of sticking with the latest or standard option to remain profitable (Tversky & Kahneman,1981;Kahneman et al.,1991), inertia, costs of knowledge on choices, misinterpreting the standard option as a suggestion (Sunstein & Reisch, 2014), and moral consequences of opting out (Pichert & Katsikopoulos, 2008). If signing up for a fire insurance policy with an insurance company is offered to traders in Ghana's different markets as the standard option, previous research from default energy (Pichert & Katsikopoulos, 2008;Momsen & Stoerk, 2014;Ebeling & Lotz, 2015;Chassot et al., 2017) indicates that traders would stick to this option even if it is costlier than alternative options such as paying huge interest on loans acquired from financial institutions. ...
... Other reasons for the default settings impact include the chance of sticking with the latest or standard option to remain profitable (Tversky & Kahneman,1981;Kahneman et al.,1991), inertia, costs of knowledge on choices, misinterpreting the standard option as a suggestion (Sunstein & Reisch, 2014), and moral consequences of opting out (Pichert & Katsikopoulos, 2008). If signing up for a fire insurance policy with an insurance company is offered to traders in Ghana's different markets as the standard option, previous research from default energy (Pichert & Katsikopoulos, 2008;Momsen & Stoerk, 2014;Ebeling & Lotz, 2015;Chassot et al., 2017) indicates that traders would stick to this option even if it is costlier than alternative options such as paying huge interest on loans acquired from financial institutions. ...
Fire outbreaks in market squares have significantly impacted traders in Ghana over the past decade, resulting in devastating financial losses and impeding their ability to recover economically. According to Anaglatey (2013), these incidents are exacerbated by poor spatial planning in market areas. Despite the availability of fire insurance, the uptake remains low due to widespread misconceptions and a general mistrust of insurance providers. This intervention aims to raise awareness and encourage the adoption of fire insurance among market traders. By addressing the prevailing misconceptions and demonstrating the value of insurance as a tool for financial protection rather than a means for profit by insurance companies, this project seeks to enhance traders’ understanding of risk management. Through strategic outreach and education, the intervention will foster a shift in perception, equipping traders with the knowledge to safeguard their investments and build resilience against future fire-related disasters.
... Individuals are expected to take these factors into account when making choices (Sunstein & Reisch, 2020: 144). One of the important studies in this field is the study by Pichert et al., (2008), which investigated the tendency of individuals towards default green options by conducting 2 field and 2 laboratory experiments. In the laboratory experiment, the decision-making behaviors of individuals encountering different electricity usage options were examined. ...
... However, some complexities arise, with certain approaches showing mixed or insignificant results. While informational nudges positively influence preferences for green power plans and default options sustainably increase green energy adoption (Pichert et al., 2008;Ghesla et al., 2020;Cardella et al., 2022), challenges persist in comprehending saving strategies, leading to limited impacts on behavior (Abrahamse et al., 2005;Ölander & John Thøgersen, 2014;Nilsson et al., 2014;Ata & Erdogan, 2020). Emerging smart home technologies offer promising avenues (Schweizer et al. 2015;, with framing and default nudges showing potential in influencing energy conservation behavior. ...
... Similarly, default options seem to be a powerful tool across various behavior categories by leveraging inertia and guiding individuals towards more sustainable choices without requiring active decision-making. For instance, presenting green energy options as default choices significantly influences consumers' preferences, as observed in studies examining energy plan selections (Pichert et al., 2008;Loock et al., 2013;Sunstein & Reisch, 2020;Ghesla et al., 2020; or making sustainable consumption default increases the selection of them (Berger et al., 2020;Antonides & Welvaarts (2020). Likewise, loss-and gain-framed of the information often results in desired behavior change depending on the context. ...
Everyday actions of people across various settings can lead to environmental issues. These automatically performed actions are overlooked in the traditional economics. Therefore, it is crucial to identify and understand pro-environmental behaviors. On the other hand, behavioral economics offers insights into cognitive constraints affecting these kinds of behaviors and develops nudges that take human beings' limited rationality into account. Therefore the study underscores the significance of nudges as empirical tools in behavioral economics for building a sustainable world and laying the foundation for pro-environmental behaviors. In this context, it examines the emerging significance of nudges in digital settings, analyzing their applications in this domain. Conducting an extensive literature review, this study categorizes pro-environmental behaviors as energy conservation, waste reduction & recycling, and sustainable consumption. Sustainable consumption is divided into grocery shopping, travel decisions, fashion & makeup choices. The research makes the importance of behavioral economics apparent by acknowledging the automatic nature of many pro-environmental behaviors and addressing the pervasive attitude-behavior gap. Consequently, by investigating the impact of both physical and digital nudges, this article offers a practical response to empirical evidence on promoting pro-environmental behavior responsible actions.
... In addition to the variables described above, two energy-related household attributes are also considered with respect to their impact on engagement in energy conservation behaviours: whether the household has been offered green electricity options and whether the household uses electricity for heating, cooking and hot water use. Country fixed effects are included to control for country-level effects such as countrylevel policies or economic conditions (Perino and Schwirplies, 2022 [70]). 26 Figure 4.1 reports the impact of the included determinants on the probability that households indicate that they always engage in the target energy conservation behaviour. ...
... Dummy variables for residence type (apartment, house or other) are also included, as well as a dummy variable identifying households with access to outdoor space in their primary residence. Country fixed effects are included to control for country-level effects (Perino and Schwirplies, 2022 [70]). ...
... 39 The inconveniences associated with switching providers, such as administrative requirements and potential service disruptions, constitute transaction costs that may deter households from switching providers. 39 If all of the characteristics of the options are assumed to be observed, this result can be considered a status-quo bias and has been evidenced in other work (e.g. Brown and Krishna, 2004;Pichert and Katsikopoulos, 2008). ...
This paper offers insights on the factors that determine household choices related to energy use, based on data from the third OECD Survey on Environmental Policies and Individual Behaviour Change (EPIC). The analysis profiles households according to patterns in reported energy use and investment in energy related technologies, assesses the factors driving such decisions and estimates households’ willingness
to pay to reduce the emissions of the electricity they use. Results suggest that the feasibility of installing low-emissions energy technologies appears to remain a key obstacle to their uptake, and that households are willing to pay a small but positive premium for electricity produced with fewer emissions. The presence of cross-country differences in behaviours and preferences signals the importance of considering local factors in approaches to energy policies. Environmental concern and environmental motivation increase engagement in sustainable choices, pointing to the cross-cutting relevance of policy efforts to improve environmental knowledge and awareness.
... These anchor points can be externally influenced, and biases can occur when initial viewpoints are not sufficiently adjusted (Epley & Gilovich, 2006). An example of this in practice would be using default framing to anchor decision-makers to a default (Lemken, 2021;Pichert & Katsikopoulos, 2008). Default framing is the concept of designing a choice scenario to show a particular option as preselected. ...
... Another strength of nudges is that they are easy and cheap to implement and maintain, as they do not require additional resources or incentives (Thaler & Sunstein, 2008). Furthermore, they are effective and robust across various domains and contexts, as they have been shown to influence behaviour in areas such as health, finance, education, charitable giving, and the environment (Mertens et al., 2022;Pichert & Katsikopoulos, 2008;Sunstein & Reisch, 2019;Taylor, 2023). ...
... One commonly applied type of nudge that combines cognitive and behavioural mechanisms with non-transparency is the default-framing nudge (Halpern, 2015;Pichert & Katsikopoulos, 2008;Selinger & Whyte, 2012). A default-framing nudge is a nudge that sets a pre-selected option as the default choice for individuals who do not actively choose otherwise. ...
Behaviour change is a crucial tool for mitigating climate change, but it should be applied ethically and equitably. Nudge interventions and liberal paternalism have become increasingly popular, but are also subject to various ethical criticisms and challenges. To explore some of these criticisms, this study investigates how pro-environmental nudges, which subtly influence people's choices without restricting their options, affect decision-making consciousness and climate justice outcomes.
The study draws on dual process theory, which distinguishes between conscious (System 2) and non-conscious (System 1) decision-making, and values theory, which suggests that value-action alignment is associated with conscious choices. Climate justice and equity elements were also included, via individuals' carbon footprint measurements. Data was collected via an online survey, which included a charity selection question as a proxy measure for pro-environmental behaviour choice. Half of the participants received a neutral charity question, and the other half received a default-framing nudge with the pro-environmental charity presented as the default. The control group showed signs of System 2 decision-making, and biospheric values and carbon footprints correlated with the pro-environmental charity choice. The default-framing nudge was effective at non-consciously encouraging participants to make the pro-environmental choice (95% versus 58% in the control). The treatment group showed signs of System 1 decision-making, and only, carbon footprints correlated with the pro-environmental charity choice. Unlike biospheric values, carbon footprints moderate the effectiveness of a nudge. The nudge was less effective for participants with higher carbon footprints.
The study confirmed that nudges can promote pro-environmental behaviour. However, it highlighted key ethical risks including inequitable results and reduced decision-making consciousness. Future research can benefit from these findings, by acknowledging these risks, and including elements such as carbon footprints to build more holistic, equitable, measures of success.
... We presumed that students in this category are inclined to be receptive to environmental issues and can easily adopt PEBs. The existing literature, most of which focuses on developed countries, reveals the importance of understanding the influencing factors that promote PEB (Chakraborty et al., 2017;Gatersleben et al., 2014;Hansmann et al., 2020;Kollmuss & Agyeman, 2002;Pichert & Katsikopoulos, 2008;Steg & Vlek, 2009;Tezel et al., 2018). Against this backdrop, our current study sought, in principle, to draw the synergies between PEB and information-sharing to promote a wastesorting culture among students at the UAHS in Ghana. ...
... Across the developed world, many empirical investigations have been conducted on PEB among students (Hansmann et al., 2020;Pichert & Katsikopoulos, 2008;Steg & Vlek, 2009;Vicente-Molina et al., 2013;Yusliza et al., 2020). However, not many studies have been conducted on PEB among students in Africa. ...
... It seeks to gauge the effect of an adequate use of information-sharing to reach out to the students. Works conducted by Pichert & Katsikopoulos (2008) determined that to study the impact of waste-sorting among individuals there are some vital characteristics for which to search. This includes the willingness of the individuals to carry their waste bin to their new settlement when they relocate. ...
People have always struggled to find a lasting solution to the persistent problem of the management and segregation of waste. The amount and variety of waste produced globally has grown exponentially with the ongoing rise in human population. As a result, there have been several studies conducted in this field, some of which have been supported by private organizations, NGOs, and governments. To protect the environment while progressively achieving global sustainable development, Pro-Environmental Behavior (PEB) has been advocated as a universal endeavor for each individual. In affluent nations like the United States of America, the United Kingdom, and France, there is a lot of research on PEB. There is, however, a dearth of research on PEB in developing nations, the majority of which are found in Africa, where poor management and segregation of waste is a major problem. Our goal with this study was to better understand how students at the University of Health and Allied Sciences in Ghana, a developing country, acquire and share knowledge on management and segregation of waste. Our study would provide further details on the main channels by which the student body communicates information about the environment. A chi-square analysis was done to ascertain the association among gender, academic level, and the students’ garbage sorting. Ultimately, we investigated how students’ attitudes or behaviors change after receiving thorough instruction on the significance of acting in an environmentally friendly manner. The following conclusions were drawn from the study: The association between a student’s characteristics, such as gender and academic level, and their propensity to act in an environmentally friendly manner appears to be weak or even nonexistent. Also, a subsequent examination on students’ garbage-sorting behaviors in relation to their academic level produced outcomes that were comparable to those of gender. The benefit of practicing PEB has been made clear to pupils, and we determined that they were ready to accept these standards after receiving this information.
... Empirical evidence indicates that automatically enrolling consumers in energy-related programs, while providing them the choice to opt-out, leads to a lower number of consumers opting out compared to those who would have chosen to opt-in. For instance, more consumers selected 'green' electricity when it was presented as the default option rather than as a choice (Pichert & Katsikopoulos, 2008) [16] . Normally, strategists offer a trial-period or offer options neutrally so as to provide consumers with an active choice but research shows that strategists should locate trigger points in consumers' lives as that is when they are most open to change (Wood, Tam, & Witt, 2005) [26] . ...
... Empirical evidence indicates that automatically enrolling consumers in energy-related programs, while providing them the choice to opt-out, leads to a lower number of consumers opting out compared to those who would have chosen to opt-in. For instance, more consumers selected 'green' electricity when it was presented as the default option rather than as a choice (Pichert & Katsikopoulos, 2008) [16] . Normally, strategists offer a trial-period or offer options neutrally so as to provide consumers with an active choice but research shows that strategists should locate trigger points in consumers' lives as that is when they are most open to change (Wood, Tam, & Witt, 2005) [26] . ...
Despite widespread acknowledgment of environmental issues, individuals often fail to take meaningful actions toward sustainability. This disconnect between awareness and behavior suggests that decision-making is influenced by psychological and social factors beyond mere information availability. Studies indicate that consumers struggle to align their actions with their beliefs due to cognitive biases, loss aversion, and social influences. Research highlights that individuals are more likely to engage in sustainable practices when defaults are set in favor of eco-friendly options, peer behaviors encourage participation, and incentives are effectively structured. Behavioral interventions, such as simplifying choices, leveraging social norms, and using persuasive technology, can significantly impact consumer decisions. Understanding these motivational drivers is crucial for fostering sustainable behaviors, as people tend to follow societal expectations, prioritize immediate benefits, and respond to well-designed incentives. By addressing these psychological barriers, organizations can develop strategies that translate environmental concerns into tangible actions, promoting long-term sustainability.
... Where a choice is offered, conventional energy is typically offered as the default; that is, a preselected option received if the consumer does nothing, in other words, does not "opt-out" (Brown & Krishna, 2004;Johnson & Goldstein, 2013). Defaults are thought to occur due to a combination of suggestion or endorsement, "anchoring" or bias toward initially presented conditions, inertia and procrastination, the endowment effect, and loss aversion (Sunstein & Reisch, 2013;Pichert & Katsikopoulos, 2008). Defaults have been used in a variety of situations to influence major life decisions such as health care (Ansher et al., 2014;Halpern et al., 2013;Halpern, Ubel, & Asch, 2007), organ donations (Abadie & Gay, 2004;Davidai, Gilovich, & Ross, 2012;Johnson & Goldstein, 2003), and retirement savings (Beshears et al., 2008;Choi, Laibson, Madrian, & Metrick, 2003;Clark & Young, 2021;Madrian & Shea, 2001). ...
... More recently, experimental, and real-world studies have applied defaults in the promotion of green energy choices. Pichert and Katsikopoulos (2008) examined the inconsistency in green electricity choice in Germany, with people stating a preference for it, but not purchasing it, utilizing laboratory experiments in default settings. The authors hypothesized that making green electricity the default option would promote the pro-environmental behavior of keeping it. ...
Alternative energy, or green energy, has the potential to mitigate carbon dioxide emitted from conventional power sources, particularly at grid parity – the point at which alternative energy reaches a levelized electricity cost that is less than or equal to purchasing grid-supplied electricity. This mixed methods study examined the effect of defaults on electricity utility selection at grid parity by young people who may be choosing a utility for the first time or may have recently experienced choosing a utility. Additionally, we investigate the justification of participants’ choice of electricity utility. A chi-squared test determined that the gray electricity utility was chosen significantly more often in the gray default condition than in either the no default or green default conditions confirming the influence of defaults even at grid parity. Those who selected green energy regardless of the default scenario expressed that they did so because the alternative energy option was the same price, but cleaner. Those who chose the conventional energy source regardless of default conveyed doubt that green energy would remain at grid parity and held a belief that conventional energy is more reliable along with feeling manipulated by the green utility’s informational message. Results from this study indicate that continuing to offer gray energy as the default and green energy as the alternative could adversely impact the predicted large-scale shift in generation from gray energy sources to green energy sources when grid parity is prevalent.
... Experiments have also been used to investigate soft interventions such as defaults, the provision of environmental information, or increasing the visibility of behaviors. For example, it has been studied whether the choice of electricity contracts changes when the green electricity contract is set as the default (Ebeling and Lotz 2015;Pichert and Katsikopoulos 2008), whether the choice of lighting will change if efficient but more expensive light bulbs are set as default (Dinner et al. 2011), whether the acceptance of a smart meter increases if it is offered as the default (Ölander and Thøgersen 2014), or whether people are more willing to offset their travel emissions if this is the default (Löfgren et al. 2012). The results show that behavior often moves in the direction of the default setting, whether because individuals perceive it as a recommendation, because their reference point has changed, or because they want to avoid the process of weighing up when making an active decision. ...
As the international community grapples with the complex challenge of climate change, policymakers need reliable data and information to develop effective strategies for reducing greenhouse gas emissions in the business and household sectors. Experimental economics offers a valuable tool for studying human behavior and economic decision-making under controlled conditions and for deriving insights for effective and socially acceptable policy measures. This paper presents contributions from experimental economics to the design and evaluation of climate policy to illustrate important insights and methodological advances.
... The defining characteristics of a nudge are the freedom-enabling means and the direction-specific purposes (Thaler & Sunstein, 2008). In the literature, nudges have been used in many areas to promote various health behaviors (Giné et al., 2010;Lai et al., 2020), eating behaviors (Kallbekken & Saelen, 2013;Richardson et al., 2021), environmental actions (Allcott, 2011;Pichert & Katsikopoulos, 2008), as well as charitable giving (Breman, 2011;Goswami & Urminsky, 2016). ...
Restaurants can nudge their customers toward more sustainable actions. However, implementing nudges may affect consumer patronage. Using a discrete choice experiment, we propose a means‐ends framework to shed light on the conditional (on patronage) impact of sustainability nudges on consumer preference for restaurants. The findings reveal that while preserving the subtleness of a specific sustainability nudge, disclosing the means or the mechanism of the nudges leads to a negative impact on consumer restaurant patronage, while revealing the ends or the goodwill behind the sustainability nudges may suggest positive effects on patronage which may in turn lead to an unconditional gain in sustainability. Furthermore, some nudges may only improve patronage if both the means and the ends of nudges are revealed. By examining two types of restaurants, we show that the type of restaurant also significantly influences the effects of sustainability nudges on patronage. This research quantifies the nuanced dynamics of how revealing the means and the ends of nudges may affect the restaurant business and provides insights for designing effective sustainability strategies in the restaurant industry.
... Typically, individuals tend to select the default opton presented to them. This lever is also efectve in promotng PEB such as the choice of 'green' electricity rates: when the green tarif is the default opton, consumers tend to select it (for more on green defaults, see Ebeling & Lotz, 2015;Kaiser et al., 2020;Pichert & Katsikopoulos, 2008;and Sunstein & Reisch, 2014). ...
Humanity is facing several environmental challenges such as pollution of the earth, water, and air, scarcity of water resources, and a decline in biodiversity, to name a few. The human factor appears to be a determinant, at least in part, of those environmental threats. How to make people behave in a more environmentally friendly manner is thus an urgent issue. Traditionally, environmental policies rest on the notion of economic rationality (the “Homo Oeconomicus” paradigm), whereby it is assumed that human action is selfishly guided by utility maximization. Accordingly, these policies are based on bans, mandates (e.g., legal norms and associated penalties), incentives (e.g., taxes, prices), and information provisions (e.g., education programs). Since the pioneering work by Herbert Simon on bounded rationality, an alternative paradigm to that of the “Homo Oeconomicus” has been emerged. This theoretical background is the backbone of the so called “behavioral public policies”, and specifically those related to the “nudging” approach. In this chapter, we will discuss the behavioral approach to environmental policy, whereby alternative tools to bans, mandates, and economic incentives are used to promote a pro-environmental behavior (PEB). Specifically, four nudges will be described to give the reader a few examples of how the nudge approach can be used to promote a PEB. The psychological mechanism underlying those nudges will be discussed. Additionally, it will be shown how the behavioral approach is quite inexpensive and can be extremely powerful. At the end of the chapter, the general discussion will address current criticisms (e.g., effectiveness and ethical considerations), and open perspectives about the environmental public policies.
... Literatürde yer alan çalışmalar yaşanan bu çevre sorunlarının en büyük sorumlusunun insanlar olduğunu göstermektedir (Özey, 2009 olabilmek için insanları çevre yanlısı davranışa yönlendirmek gerekmektedir (Pichert & Katsikopoulos, 2008). ...
There is an increasing number of studies on nudging, a policy tool of behavioral economics, to overcome environmental problems. These so-called green nudges have been criticized for not being effective enough. This study aims to assess whether the criticisms are justified in the context of the Sustainable Development Goals (SDGs), and to demonstrate how effective green nudges are as a policy tool. The methodology of the thesis is meta-analysis, which allows generalizations to be made by analyzing a large number of studies. The meta-analysis data were collected from a total of 85 green nudges in 59 studies published between 2011 and 2024. The mean effect size calculated with the random effects model was 0.313 [95% CI= (0.261 - 0.365), z = 11.896, p < 0.000]. This result shows that green nudges have a positive effect on pro-environmental behaviors. In addition, three different subgroup analyses were conducted in this study. In the first subgroup analysis, green nudges were analyzed by grouping them according to Sustainable Development Goals. In the second subgroup analysis, green nudges were categorized according to their types. In the last subgroup analysis, digital and face-to-face green nudges were analyzed. According to the overall results of the meta-analysis, green nudge has a medium effect size. Moreover, the true effect size distribution is largely positive. This suggests that green nudges can be an important behavioral policy tool for the SDGs, complementing traditional policy instruments.
... This might incentivize users to buy green products because they are more visible than the non-eco-friendly choices. In this direction, positive effects of nudging on pro-environmental behavior were shown via "green defaults" (Pichert & Katsikopoulos, 2008), for example, setting a default option for online shopping (Taube & Vetter, 2019) or setting a default option with higher carbon-offset payments on online flight-booking platforms (see Székely et al., 2016). However, even in the presence of "default effects" or AI-powered virtual assistants offering green recommendations, the literature suggests that environmental choices are highly influenced by factors such as personal orientations (He et al., 2022) and social influences (Gifford & Nilsson, 2014). ...
... In this research, we extend prior knowledge by examining two dominant yet unique hybrid product default policies (opt-in vs. opt-out), while simultaneously considering attribute-related focus, finding that those prioritizing efficiency had higher purchase behavior toward the optout hybrid product default policy, while those focused on effectiveness were more inclined to prefer the opt-in default policy. While past literature has supported the use of opt-out policies in cases such as organ donation (Johnson & Goldstein, 2003) or green electricity consumption (Pichert & Katsikopoulos, 2008), in the case of hybrid products, it is seemingly more paramount to match the default attribute to the desired attributes or features. Indeed, consumers often perceive the default option as influential in product evaluation, relying on it as a valuable source of information (Brown & Krishna, 2004;Prelec et al., 1997). ...
In today's marketplace, products can feature both “green” and “non‐green” attributes and consumers, with the press of a button, can select their preferred operating mode (green vs. nongreen). In this research, we define such products as hybrid, arguing that their choice architecture design—specifically, the default operational mode—plays a pivotal role in influencing consumer evaluation and purchase behavior. In four experiments, we found that consumers view a hybrid product as more environmentally friendly when the green mode is the default setting and can be turned off (opt‐out), rather than when the green mode must be activated (opt‐in). Specifically, we show that, when efficiency (vs. effectiveness)—related attributes are valued, the opt‐out (vs. opt‐in) default policy enhances purchase behavior. Moreover, we find that this effect is mediated by green attribute centrality, in that consumers perceive the opt‐out (vs. opt‐in) default policy as more central. Finally, we find that the effect of default policy is stronger for consumers with an analytical, as opposed to a holistic, thinking style. This article contributes to both default policy and hybrid product literature and provides managerial implications for the design and promotion of hybrid products.
... The effect of green default nudges is mostly independent of environmental attitudes (Vetter and Kutzner 2016). Green defaults have increased enrollment in energy conservation and green energy programs (Broman Toft et al. 2014;Pichert and Katsikopoulos 2008;Sunstein andReisch 2014, 2016). Furthermore, green defaults have increased the choice of more energy efficient light bulbs (Dinner et al. 2011) and Smart Grid technologies (Ölander and Thøgersen 2014). ...
Green nudges are used to promote conservation and pro-environmental behavior. This study examines the lasting effectiveness of a green default nudge in paper conservation, where price incentives are absent. At a private college in New York City, the default print setting was changed from single-sided to double-sided in Spring 2019, accompanied by a salient pop-up window that asked students to print double-sided. Analyzing student-level data over four semesters (Spring 2018 and Fall 2018 as control, Spring 2019 and Fall 2019 as treatment), this research contributes to the literature as it studies the effect of the nudge in the absence of pecuniary incentives. The findings support the hypothesis that this green default nudge was effective in promoting paper conservation and increasing resource efficiency. Results show that double-sided printing increased while single-sided printing decreased, leading to an overall reduction in paper usage. Employing a panel regression model with student fixed effects, this study finds that the nudge had a statistically significant effect in reducing the sheets per page ratio, and it improved the efficient use of paper by 19 percent. This inexpensive behavioral intervention proves successful in promoting environmental behavior and reducing paper consumption, which reduces greenhouse gas emissions.
... For instance, the "choice architecture" of decision environments, such as default options, can be strategically selected to impact group or individual decision-making. Examples include automatic enrollment in retirement savings plans [36] or setting renewable energy sources as the default option [37], both of which have been shown to positively influence people's choices. ...
Policy compression is a computational framework that describes how capacity-limited agents trade reward for simpler action policies to reduce cognitive cost. In this study, we present behavioral evidence that humans prefer simpler policies, as predicted by a capacity-limited reinforcement learning model. Across a set of tasks, we find that people exploit structure in the relationships between states, actions, and rewards to “compress” their policies. In particular, compressed policies are systematically biased towards actions with high marginal probability, thereby discarding some state information. This bias is greater when there is redundancy in the reward-maximizing action policy across states, and increases with memory load. These results could not be explained qualitatively or quantitatively by models that did not make use of policy compression under a capacity limit. We also confirmed the prediction that time pressure should further reduce policy complexity and increase action bias, based on the hypothesis that actions are selected via time-dependent decoding of a compressed code. These findings contribute to a deeper understanding of how humans adapt their decision-making strategies under cognitive resource constraints.
... Schwartz, 2006;Stern et al., 1993;Thompson & Barton, 1994). Practical nudging examples include feedback on energy usage, default green electricity options or reduced plate sizes to curb food waste (Delmas et al., 2013;Kallbekken & Saelen, 2013;Pichert & Katsikopoulos, 2008). ...
Recent advancement in Generative Conversational Artificial Intelligence (AI) has opened the possibility of promoting chatbots for nudging. Tourists returning home from destinations that enforce sustainable transport regulations might be nudged to continue traveling sustainably. Through exploratory qualitative research, this study conceptualizes a chatbot to facilitate pro-environmental behavior spillover among domestic tourists in the Gili Islands, Indonesia. The Service Design approach and Grounded Theory were applied throughout the data collection process involving semi-structured in-depth interviews, focus group discussions and field observations. Insights obtained from stakeholders from multidisciplinary backgrounds were used to provide an overview of how the chatbot can be developed and the potential impact it could bring. A theoretical model predicting factors that play important roles in adopting the proposed chatbot and its respective nudges was developed. It informs policymakers and practitioners about the potential use of AI to help transform tourist experiences and shape lasting responsible behaviors.
... Some experimental studies concentrate on the elements of the psychological environment of individuals that would influence their propensity to purchase green electricity. Ref. [11] explains that more consumers tend to choose a green tariff when it is the default option than when "gray" elec-tricity is the default. Framing also plays a major role: when the attributes of green electricity are positively presented, people tend to select renewable energy more frequently, independently of their initial attitude towards the climate and the environment [12]. ...
Reducing energy consumption and carbon emissions is necessary in the fight against climate change. We are interested in the situation of Quebec (Canada), where low-cost hydropower sold below market value, akin to a consumption subsidy, leads to high residential consumption. We conducted an experiment to test whether individuals would be willing to pay more for electricity. Increasing regulated prices closer to their market value would result in a direct welfare gain and free some green energy, reducing greenhouse gases (GHGs) in other sectors. Giving clear and transparent information on the consequences of the price increase induces a majority of people to choose to pay more. In addition to the economic benefit of the public good, the presence of the environmental benefit increases contributions. Participants with a more-severe budget constraint tend to contribute less. These results are encouraging for the development of efficient energy policies reducing GHG emissions.
... Behavioral interventions have been used in various studies to promote environmentally friendly behavior [8][9][10][11][12][13][14][15][16][17][18][19][20] . Such interventions nudge behavioral responses in various ways, for example, by giving real-time feedback on energy consumption [9][10][11][12][13] , setting the green option as the default [21][22][23][24] or labeling products as green 14,[25][26][27] . Previously, behavioral interventions have been aimed at, for example, curtailing energy consumption [9][10][11][12][13]13,28 , or increasing subscriptions to green electricity tariffs 21,22,29,30 . ...
Green technologies, such as solar panels, foster the use of clean energy, yet often involve large-scale investments. Hence, adoption by retail consumers has been a key barrier. Here, we show that message framing can significantly increase customers’ serious commitment to adopting solar panels by providing empirical evidence in the field from a large-scale randomized controlled trial with a nationwide online retailer in the Netherlands (N = 26,873 participants). We design four messages aimed at promoting the purchase behavior of solar panel installations. Our messages present outcomes for oneself or for the environment and highlight cost savings versus earnings (for oneself) or reducing emissions versus generating green electricity (for the environment). Across all messages, we observe a higher rate of customers committing to solar panels compared to the baseline. However, the framing in terms of financial savings for oneself was by far the most effective, resulting in a 40% higher level of commitment than the baseline and 30% higher than the average of the other three messages, which were not significantly different in effect from each other. Our results show that message framing is cost-efficient and scalable among retail consumers to promote large-scale investments in green technologies and thus clean energy.
... In fact, in almost all German communities, the green usage rate was, for an extended period, under 1% (Sunstein & Reisch, 2014). Even when the green usage rate was generally close to zero throughout Germany, two communities showed green usage rates well above 90% (Pichert & Katsikopoulos, 2008;Kaenzig et al., 2013). This change resulted from a default. ...
This paper explores decision-making in the context of active default choices, i.e., choices made when no alternative is presented. Using data from a UT energy study, the paper examines how active defaults influence participation in a hypothetical green renewable energy utility program. The study analyzes collective effects and considers demographic and psychographic factors. Significant impacts on default choices and framing were observed for attributes like age, political preference, years at current residence, perception of home efficiency, natural gas consumption, and importance of saving energy. The research demonstrates that specific demographic attributes are more susceptible to nudging effects when presented with a climate-change-related program, but scenarios with “opt-out” framing alone yielded the most significant results across all attributes. Consequently, the paper recommends that policymakers and utility firms proposing renewable energy programs use an “opt-out” default choice for certain demographic groups to enhance receptivity and participation. The study’s average of 46% willingness to participate in a more expensive utility renewable energy program suggests a need for further investigation into the link between hypothetical willingness and actual follow-through. Ultimately, the findings underscore the potential benefits of default choices and nudging effects in addressing climate change-related issues among stakeholders seeking to mitigate environmental impacts.
... Several studies described some benefits of using green nudges for promoting more sustainable consumption choices in various product categories such as light bulbs (Dinner et al., 2011), energy source options (Pichert & Katsikopoulos, 2008), or the reuse of hotel towels (Goldstein et al., 2008), while at the same time, other researchers notice that although some interventions may be successful at changing behavior in one area, it does not necessarily entail transferring these approaches to other areas and expecting similar results in terms of behavior change (Hedin et al., 2019). Therefore, both scholars and practitioners should be cautious when 867 comparing and transferring interventions aimed at e.g. ...
Research background: In the last few years, e-commerce market has increased in population shares, but the situation has changed dramatically since the Covid-19 pandemic. Electronic marketplaces have changed due to rapid digitalization and shopping. Online services offer the possibility to choose a different delivery method such as home delivery or out-of-home delivery. This aspect of the e-commerce market faces an increased interest among practitioners and academia in the field of sustainable last mile deliveries. Interestingly, the subject literature consists of papers analyzing the e-commerce impact on the last-mile delivery. However, the identification of factors for choosing a delivery method and factors that motivate e-customers to choose an eco-friendly delivery method is still an unrecognized field of research. Purpose of the article: The authors of the paper focused on the e-customer perspective on sustainable deliveries in cities. Thus, the main purpose of the paper is to compare factors among the generations that motivate e-customers for choosing a delivery method. Methods: The research was conducted among 1.110 e-customers in Poland in 2021. The paper aims to answer the following research question: what factors motivate each generation for choosing a delivery method? To answer the above-mentioned question, the correspondence analysis (MCA) is prepared that help to identify and compare factors in each generation. Findings & value added: The original research procedure focused on the use of multivariate statistical methods in the study of e-customers' preferences. The analysis revealed three clusters of e-customers in terms of pro-sustainable factors: (a) aged 65+ without pro-sustainable tendency, (b) aged 18-64 with pro-sustainable attitudes, and (c) mixed with no identified delivery preferences. As a result of the research, it can be concluded that the parcel price and the possibility of free return are still the most important factors in choosing the delivery method. From a business/practical perspective, the research results can be used by companies that are the main stakeholders in last mile deliveries, including mainly forwarders and transport companies.
... Ecological theorists emphasize ten adaptive toolbox heuristics that underpin both intuitive and deliberate judgments: (1) recognition [94], which establishes that if one of two alternatives is recognized, you should deduce that it is the most important; (2) fluency [95,96] asserts that if you identify two choices, but one stands out as being recognized more swiftly, you can infer that it holds greater significance; (3) choose the best [97], which states that you should first look for clues in expiration order, then stop looking for a track that is recognized, and finally choose the alternative that this track suggests; (4) tallying [98], which states that when estimating a criterion, you should ignore weights and simply count the number of positive clues; (5) satisficing [99,100], which refers to searching for alternatives and selecting the first that meets or exceeds your aspiration level; (6) equality [101], which states that resources must be allocated equally to each of n alternatives; (7) default [102,103], which states that if a default occurs, nothing should be done; (8) tit-for-tat [104], which refers to cooperating first and then imitating the other's behavior; (9) imitate the majority [105], which refers to imitating the majority of your group's behavior; and (10) imitate the successful [105], which establishes that you should mimic the most successful individual's behavior. ...
This paper explores the dual-processing hypothesis of the mind, Systems 1 and 2, by examining debates between cognitive and evolutionary psychologists. I structure the discussion in a back-and-forth manner to emphasize the differences. I show that, while the majority of cognitive psychologists now embrace the dual-processing theory of the mind, Systems 1 and 2, there are still some who disagree. Most evolutionary psychologists, in contrast, dispute the existence of System 2, a domain-general mind, although some disagree. However, a consensus is growing in favor of System 2, although evolutionary psychologists’ concerns must be addressed. The uniqueness of this review is that it contrasts the perspectives of cognitive psychologists with evolutionary psychologists, which is uncommon in the cognitive psychology literature, which tends to overlook evolutionary viewpoints.
... However, the default option has proved to be the most effective in many domains (Savadori 2020), so it has been considered in the present investigation. In prior studies, it has successfully promoted pro-environmental choices, such as the uptake of green energy contracts (Pichert and Katsikopoulos 2008;Ebeling and Lotz 2015;Hummel and Maedche 2019), it has strongly impacted charitable donations (Altmann et al. 2014;Goswami and Urminsky 2016), and it has helped to increase retirement savings (Choi et al. 2003;Cronqvist et al. 2018). ...
People often make inefficient decisions for themselves and the community (e.g. they underuse medical screenings or vaccines and they do not vote) also because of their individual characteristics, such as their level of avoidance or anxiety. In recent years, governments have successfully applied strategies, called “nudges”, to help people maximizing their decisions in several fields; however, the role of individual characteristics has been poorly explored. The present study investigated whether one kind of nudge, the default option (automatic enrolment in a specific plan), can modulate the influence of such individual differences, promoting favourable decisions in different field, such as the medical and civic ones. One hundred and eighty-three participants completed the Trait Anxiety Inventory, the General Decision-Making Styles Inventory and scenarios about health and civic decisions. Participants have hypothetically been enrolled by default or not enrolled in specific plans and had to decide whether adhere or not to the plan proposed. Result showed that the default option drives anxious and avoidant individuals, who usually refuse to make a choice due to their overestimation of negative events’ occurrence, to undergo medical screenings and vaccine and to vote more. Nudge confirmed its effectiveness in favouring better decisions among people according to their individual differences.
Il existe de nombreuses idées fausses sur les nudges et leur usage, et certaines d’entre elles sont très répandues. Par exemple, certaines personnes pensent que les nudges sont manipulateurs, qu’ils sont cachés ou dissimulés, qu’ils sont difficiles à définir, qu’ils portent atteinte à l’autonomie, qu’ils sont fondés sur une confiance excessive dans le gouvernement, qu’ils exploitent les biais comportementaux, qu’ils dépendent de la croyance que les êtres humains sont irrationnels et qu’ils ne fonctionnent qu’à la marge, qu’ils n’affectent pas les structures et qu’ils ne peuvent pas accomplir grand-chose. Il s’agit là d’erreurs. Les nudges sont généralement transparents plutôt que dissimulés ou sous forme de manipulation ; les nudges ne sont pas difficiles à définir ; les nudges respectent toujours, et souvent encouragent, l’autonomie ; parce que les nudges insistent sur la préservation de la liberté de choix, ils n’accordent pas une confiance excessive au gouvernement ; de nombreux nudges sont éducatifs, et même lorsqu’ils ne le sont pas, ils tendent à rendre la vie plus simple et plus navigable ; et certains nudges ont un impact assez important. Il est vrai que pour d’innombrables problèmes, les nudges sont à peine suffisants. Ils ne peuvent pas éliminer la pauvreté, le chômage et la corruption. Mais en soi, toute initiative individuelle – qu’il s’agisse d’une taxe, d’une subvention, d’un mandat ou d’une interdiction – a peu de chances de résoudre les grands problèmes. Les atténuer est déjà une réussite.
La Tierra es un bien público afectado por una externalidad negativa, el cambio global. Para combatir este último y hacer frente a los problemas medioambientales, la Economía de la Conducta Sostenible ha desarrollado numerosas herramientas, entre las que destacan los nudges verdes. Su ventaja es su bajo coste comparativo, tanto en términos económicos como políticos. Un nudge consiste en intervenir deliberadamente en la arquitectura de la elección, pero sin cambiar los incentivos monetarios o las opciones mismas, con el objetivo de desarrollar «políticas sensibles, de bajo coste, con una referencia cercana a cómo los seres humanos piensan y se comportan». Se podría decir que son «recomendaciones» y. en ningún caso, imposiciones. En este artículo empleo la clasificación de Schubert (2017), dividiéndolos en cuatro grupos: la opción por defecto; los incentivos sociales para actuar verde; aquellos que destacan los costes ambientales; y los dedicados a remover las barreras para actuar de forma sostenible. También se analiza su efectividad, llegando a la conclusión de que, si bien pueden ser efectivos, no son la solución definitiva, debiendo combinarse con otro tipo de acciones como los impuestos, tasas, etc.
The rapid advancements in Industry 4.0 technologies have significantly transformed logistics and supply chain management, making agility a critical capability for businesses to remain competitive. This study explores the integration of agile approaches within Logistics 4.0, focusing on how digitalization, automation, and real-time data processing enhance supply chain responsiveness. By leveraging technologies such as the Internet of Things (IoT), cyber-physical systems (CPS), big data analytics, and cloud-based manufacturing, companies can optimize logistics processes, reduce inefficiencies, and adapt to dynamic market conditions. The findings highlight that agility in Logistics 4.0 enables businesses to improve flexibility, resilience, and customer responsiveness. This research contributes to the growing discourse on supply chain agility by providing insights into the practical applications of agile methods in logistics. Future studies should further investigate the operational implications of Logistics 4.0 for supply chain performance and sustainability.
Climate neutrality demands, therefore, not only a technological but also a change at the level of human behaviour. This chapter discusses the adaptation of behavioural economics in bringing about the desired change to promote sustainable practices and alleviate barriers to climate-neutral behaviour. Nudge theory, loss aversion, and social norms explain how cognitive bias, socioeconomic factors, and institutional constraints stand as barriers for sustainable behaviour. These challenges are counteracted by using the proposed INSPIRE framework, which combines strategies such as incentivization, nudges, feedback mechanisms, gamification, community-based interventions, reminders, and encouragement. Measurable impacts on carbon emissions have been seen in real-world examples such as programs for energy conservation, waste reduction, and adoption of renewable energy. Finally, the chapter addresses the policy implications of Behavioural Insights as a tool for integrating it with climate strategies, leveraging technologies like AI and IoT to scale interventions and promote cultural adaptability and inclusion. Methods of measuring intervention effects- challenges such as attribution and cultural differences are discussed along with recommendations for improved methodologies and multi-metric evaluation. Behavioural economics bridges the knowledge-action gap, offering effective tools for pro-environmental action. The book concludes with a call to policymakers, businesses, and communities to implement these insights to drive the transition to climate neutrality.
In this review, we examine whether presumed consent organ donation policies save lives. We compare presumed consent defaults (where people are considered organ donors by default but can opt out of donation) with explicit consent defaults (where people are considered nondonors by default but can opt in to be considered donors). Experimental, cross-sectional, and longitudinal evidence indicates that rates of consent, donation, and transplantation are higher under presumed consent policies than under explicit consent policies. The evidence also suggests, however, that presumed consent is one factor among many that determine the number of organs donated and lives saved; policymakers must balance a number of other considerations to ensure that shifting to a presumed consent system will boost donation and transplantation rates. We underscore the importance of investing in health care infrastructure to support organ procurement and transplantation and offer empirically informed recommendations to enable consent policies to save the most lives.
We propose a new conceptual framework for behavioral policy design that we call choice architecture 2.0. We argue that in addition to considering how different choice environments affect decisions (as in conventional choice architecture), choice architects should also be aware of the implicit interaction taking place between the targets of the choice architecture and themselves. When confronting a decision, people often engage in a social sensemaking process that entails an assessment of (a) the beliefs and intentions of the choice architect and (b) how their decision will be construed by the choice architect and other observers. We present examples of how this choice architecture 2.0 framework can be used to anticipate factors that moderate the success or failure of behavioral policy interventions, and we provide examples of factors that may trigger social sensemaking. We also present a template for a social sensemaking audit that policymakers can perform before implementing any particular design of choice architecture.
This chapter explores interventions of energy consumption in households and their impacts on behavioural changes by addressing the main behavioural barriers of sustainable energy consumption. The main objectives of this chapter are to identify the importance of nudges in reducing energy consumption and implementation of renewable microgeneration technologies and to develop recommendations for tailor-made interventions. A qualitative research method is applied to analyse the climate change mitigation measures linked to energy consumption in households based on systematic literature review. Traditional economic and regulatory policy tools can be effectively supplemented by nudges; however, more research is necessary in this field.
The multi-faceted approache to environmental analysis helps us to take deep insights in tracing the behavioural aspect and provides a rich ground for identifying the quiddity and reverberations of human capabilities. This article analyses the extending importance given to the relationship between economics of behaviours and environment. The literature signifies varying solutions to primitive economic mechanism deployed in terms of environmental dimensions that usually happen to be fit unwell. However, it questions the hardships in estimating the general welfare along with designing a comprehensive environmental policy keeping in mind the psycho-economic impact. The study critically examines the behavioural domains of initiatives including green nudges as well as corporate environmental responsibility.
“Behavioral economics” is a branch of economics that combines ideas from psychology and economics to get a deeper comprehension of the factors that influence individuals’ economic choices. The relationship between environmental sustainability and behavioral economics is a dynamic and expanding area of research. Behavioural economics, which combines psychological and economic concepts, gives light on how human decision-making biases and cognitive limits influence environmental choices and behaviors. Understanding this relationship is critical for developing effective policies and interventions to enhance sustainability in a world confronted with serious environmental concerns. In this article, we will look at some of the most important facets of this relationship, such as behavioral biases and heuristics, policy implications, and the impact of nudges. Through a review of researches in the arena of behavioural economics, especially in the context of rewards and penalties, defaults and green nudges as well as human biases like loss aversion and status quo, an attempt is made to shed light on how policymakers can design mire effective policies to steer pro-environment behaviors. The chapter addresses case studies and real-world applications of behavioral economics in environmental situations, as well as the possibilities for future research and policy initiatives that harness the power of behavioral insights to support sustainable behaviors.
The current notice and choice privacy framework fails to empower individuals in effectively making their own privacy choices. In this Article we offer evidence from three novel experiments showing that at the core of this failure is a cognitive error. Notice and choice caters to a heuristic that people employ to make privacy decisions. This heuristic is meant to distinguish between a party's good or bad intent in face‐to‐face‐situations. In the online context, it distorts privacy decision‐making and leaves potential disclosers vulnerable to exploitation.
From our experimental evidence exploring the heuristic's effect, we conclude that privacy law must become more behaviorally aware. Specifically, privacy law must be redesigned to intervene in the cognitive mechanisms that keep individuals from making better privacy decisions. A behaviorally‐aware privacy regime must centralize, standardize and simplify the framework for making privacy choices.
To achieve these goals, we propose a master privacy template which requires consumers to define their privacy preferences in advance—doing so avoids presenting the consumer with a concrete counterparty, and this, in turn, prevents them from applying the intent heuristic and reduces many other biases that affect privacy decision‐making. Our data show that blocking the heuristic enables consumers to consider relevant privacy cues and be considerate of externalities their privacy decisions cause.
The master privacy template provides a much more effective platform for regulation. Through the master template the regulator can set the standard for automated communication between user clients and website interfaces, a facility which we expect to enhance enforcement and competition about privacy terms.
This study explores the potential of behavioral economics in resolving public conflicts related to offshore wind power development. An experimental survey assessed residents' preferences for policy measures based on principles of behavioral economics, while also examining differences across regions, occupations, and instances of similar public discourse. The results indicate that framing environmental policy and incorporating experiential learning effectively enhance policy acceptance. However, incentive design strategies should be differentiated based on regional contexts. Comparisons across regions reveal that fishing communities prioritize economic factors, while non-fishing residents emphasize environmental values and procedural † 본 논문은 한국해양수산개발원에서 발간한 「주민행태기반 해양정책 수용성 제고 설계 방안 연구(2023년)」의 일부 내용을 수정·보완하여 작성하였음.
This chapter considers some practices in which digital, social, and environmental aspects intersect to shape a particular habitus. These practices can have both positive and negative implications for addressing digital-environmental poverty at different levels (micro, meso, and macro). As we explore these topics, we initially focus on (digital) nudging, a concept rooted in behavioral economics to indicate any aspect of the “choice architecture” that subtly influences people’s choices without eliminating alternative options (Thaler & Sunstein, 2008). Research within the field of Green Information Systems has suggested that digital nudging can partially motivate users to adopt eco-friendly behaviors. In doing so, this chapter reviews the effects produced by different strategies of nudging in motivating digital pro-environmental behaviors. However, it also highlights that even though some positive effects of nudging have been identified by the literature, environmental choices in the long term still highly depend on personal orientations and social influences.
Though social media is considered to enhance environmentally conscious behaviour, there has not been sufficient investigation on the effects of specific affordances pertaining to green social networks (GSN). Also, the mechanism by which these affordances affect pro‐environmental behaviour (PEB) has not been explored in depth. Addressing these research gaps, this study first introduces three context‐specific GSN affordances, such as green self‐identification, green broadcasting, and green social endorsement. Further, drawing inspiration from social influence theory and the Stimulus‐Organism‐Response framework, the study put forth a novel framework that explains the varying effects of the conceptualized GSN affordances on PEB through the mediating mechanism of collective intention. The framework also indicates perceived informational and emotional values as moderators that accentuate the indirect influence of GSN affordances on PEB. Adopting a time‐lagged multi‐wave online survey design, 314 valid responses were obtained. The results of the moderated mediation analysis reveal that: (1) collective intention partially mediates the relationships between green broadcasting and PEB, and between green social endorsement and PEB; (2) collective intention fully mediates the relationship between green self‐identification and PEB. Further, the indirect effect of green self‐identification on PEB is positively moderated by emotional values and not moderated by informational values. Interestingly, the indirect effects of green broadcasting and green social endorsement on PEB are positively moderated by both informational and emotional values. These findings offer significant implications for researchers and practitioners who look out for online communities to promote actual PEB.
As options for renewable procurement have proliferated to meet consumer demand, it is more complicated for consumers to navigate the available choices. In addition to installing distributed energy resources (e.g., solar PV), consumers can subscribe to green tariffs. Depending on the electricity supplier, the default amount of renewable content will vary (e.g., Community Choice Aggregation vs. investor-owned utilities). There are also options to purchase greener electricity, up to 100 %. It is unclear how this context influences household-level decisions to install solar and vice versa. This study uses a discrete choice experiment to estimate the influence of renewable content, solar PV installation, change in electricity costs, engagement level, and procurement duration on household-level decisions. Data were collected from 600 participants randomly assigned to either a 15 % or 30 % renewable default option. The results suggest that (1) effort is a relatively minor factor in renewable procurement decisions even when comparing PV adoption versus green electricity, (2) relative perceptions of renewable procurement options increase as the default renewable content increases, and (3) some consumers are more sensitive to the default level and will shift their behavior accordingly. This research may improve program design to encourage adoption of multiple kinds of renewable energy.
Several independent lines of research bear on the question of why individuals avoid decisions by postponing them, failing to act, or accepting the status quo. This review relates findings across several different disciplines and uncovers 4 decision avoidance effects that offer insight into this common but troubling behavior: choice deferral, status quo bias, omission bias, and inaction inertia. These findings are related by common antecedents and consequences in a rational-emotional model of the factors that predispose humans to do nothing. Prominent components of the model include cost-benefit calculations, anticipated regret, and selection difficulty. Other factors affecting decision avoidance through these key components, such as anticipatory negative emotions, decision strategies, counterfactual thinking, and preference uncertainty, are also discussed.
A series of studies examines whether certain biases in probability assessments and perceptions of loss, previously found in experimental studies, affect consumers' decisions about insurance. Framing manipulations lead the consumers studied here to make hypothetical insurance-purchase choices that violate basic laws of probability and value. Subjects exhibit distortions in their perception of risk and framing effects in evaluating premiums and benefits. Illustrations from insurance markets suggest that the same effects occur when consumers make actual insurance purchases.
The authors examine the effects of using a subtractive versus an additive option-framing method on consumers' option choice decisions in three studies. The former option-framing method presents consumers with a fully loaded product and asks them to delete options they do not want. The latter presents them with a base model and asks them to add the options they do want. Combined, the studies support the managerial attractiveness of the subtractive versus the additive option-framing method. Consumers tend to choose more options with a higher total option price when they use subtractive versus additive option framing. This effect holds across different option price levels (Study 1) and product categories of varying price (Study 2). Moreover, this effect is magnified when subjects are asked to anticipate regret from their option choice decisions (Study 2). However, option framing has a different effect on the purchase likelihood of the product category itself, depending on the subject's initial interest in buying within the category. Although subtractive option framing offers strong advantages to managers when product commitment is high, it appears to demotivate category purchase when product commitment is low (Study 3). In addition, the three studies reveal several other findings about the attractiveness of subtractive versus additive option framing from the standpoint of consumers and managers. These findings, in turn, offer interesting public policy and future research implications.
One of the main themes that has emerged from behavioral decision research during the past 2 decades is the view that people's preferences are often constructed in the process of elicitation. This concept is derived in part from studies demonstrating that normatively equivalent methods of elicitation often give rise to systematically different responses. These "preference reversals" violate the principle of procedure invariance that is fundamental to theories of rational choice and raise difficult questions about the nature of human values. If different elicitation procedures produce different orderings of options, how can preferences be defined and in what sense do they exist? Describing and explaining such failures of invariance will require choice models of far greater complexity than the traditional models. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Die Liberalisierung des Strommarktes hat dazu geführt, dass Kunden erstmals die Möglichkeit haben, gezielt Strom aus erneuerbaren Energien nachzufragen. Für bestehende und neue Anbieter in der Elektrizitätsbranche bietet das Ökostrom-Marketing einen möglichen Ausweg aus dem ruinösen Verdrängungswettbewerb im Markt für Egalstrom und somit die Chance zum Erreichen nachhaltiger Wettbewerbsvorteile. Der Marktanteil dieser Produkte ist heute aber noch gering: Ökostrom ist zumeist ein (teures) Nischenprodukt. Aus der Perspektive einer Nachhaltigen Entwicklung ist die heutige Öko-Nische zwar ein notwendiger, aber bei weitem nicht hinreichender Schritt. Ausgehend von diesem Grundverständnis fragt diese Arbeit nach Wegen einer Diffusion ökologischer Stromprodukte von der Nische in den Massenmarkt, wie sie beispielsweise bei Bio-Lebensmitteln bereits auf dem Markt zu beobachten ist.
Die Analyse bietet Antworten auf Fragen wie: Wie gross ist das Marktpotential für Ökostrom jenseits der Nische in einem liberalisierten Elektrizitätsmarkt? Wer sind die Marktakteure, die einen Beitrag zur Erschliessung dieses Potentials leisten könnten? Worin liegt dieser Beitrag für verschiedene Akteure? Welche Herausforderungen haben Unternehmen bei einem Übergang von der Nische zum Massenmarkt zu bewältigen? Was sind Merkmale und Praxisbeispiele (aus den USA, Grossbritannien, Deutschland und der Schweiz) erfolgreicher Marketingstrategien für Ökostrom jenseits der Nische? Und wie können die Rahmenbedingungen gestaltet werden, um eine solche Entwicklung zu fördern?
Differences in opt-in and opt-out responses are an important element of the current public debate concerning on-line privacy and more generally for permission marketing. We explored the issue empirically. Using two on-line experiments we show that the default has a major role in determining revealed preferences for further contact with a Web site. We then explore the origins of these differences showing that both framing and defaults have separate and additive effects in affecting the construction of preferences.
Numerous studies have demonstrated that theoretically equivalent measures of preference, such as choices and prices, can lead to systematically different preference orderings, known as preference reversals. Two major causes of preference reversals are the compatibility effect and the prominence effect. The present studies demonstrate that the combined effects of prominence and compatibility lead to predictable preference reversals in settings where improvements in air quality are compared with improvements in consumer commodities by two methods-willingness to pay for each improvement and choice (For which of the two improvements would you pay more? Which improvement is more valuable to you?). Willingness to pay leads to relatively greater preference for improved commodities; choice leads to relatively greater preference for improved air quality. These results extend the domain of preference reversals and pose a challenge to traditional theories of preference. At the applied level, these findings indicate the need to develop new methods for valuing environmental resources.
The disappointment about the weak direct relationship between environmental concern and specific environmentally related behaviors is due to the incorrect assumption that general attitudes like environmental concern are direct determinants of specific behaviors. Because only situation-specific cognitions are direct determinants of specific behaviors, future research should no longer view environmental concern as a direct, but as an important indirect determinant of specific behavior. As a general orientation pattern it influences the definition of a specific situation that is the generation of situation-specific cognitions. Results of a study analysing high vs low environmentally concerned students’ decision to request an information brochure about green electricity products confirms this assumption.
Subjects read scenarios concerning pairs of options. One option was an omission, the other, a commission. Intentions, motives, and consequences were held constant. Subjects either judged the morality of actors by their choices or rated the goodness of decision options. Subjects often rated harmful omissions as less immoral, or less bad as decisions, than harmful commissions. Such ratings were associated with judgments that omissions do not cause outcomes. The effect of commission is not simply an exaggerated response to commissions: a reverse effect for good outcomes was not found, and a few subjects were even willing to accept greater harm in order to avoid action. The “omission bias” revealed in these experiments can be described as an overgeneralization of a useful heuristic to cases in which it is not justified. Additional experiments indicated that subjects' judgments about the immorality of omissions and commissions are dependent on several factors that ordinarily distinguish omissions and commissions: physical movement in commissions, the presence of salient alternative causes in omissions, and the fact that the consequences of omissions would occur if the actor were absent or ignorant of the effects of not acting.
In the age of the Internet and easy access to almost infinite information, the problem of information overload among consumers is bound to become of great importance to marketers. By means of simulations we show that this ‘tyranny of choice’ is avoidable. Consumers can neglect most product information and yet make good choices, so long as either there is no conflict among the product attributes or the attributes are unequally important. In these conditions, only one attribute is enough to select a good option - one within ten percent of the highest value possible. We conclude with marketing implications of these findings.
Is the mind, by design, predisposed against performing Bayesian inference? Previous research on base rate neglect suggests that the mind lacks the appropriate cognitive algorithms. However, any claim against the existence of an algorithm, Bayesian or otherwise, is impossible to evaluate unless one specifies the information format in which it is designed to operate. The authors show that Bayesian algorithms are computationally simpler in frequency formats than in the probability formats used in previous research. Frequency formats correspond to the sequential way information is acquired in natural sampling, from animal foraging to neural networks. By analyzing several thousand solutions to Bayesian problems, the authors found that when information was presented in frequency formats, statistically naive participants derived up to 50% of all inferences by Bayesian algorithms. Non-Bayesian algorithms included simple versions of Fisherian and Neyman–Pearsonian inference.
Consumer decision making has been a focal interest in consumer research, and consideration of current marketplace trends ( e.g., technological change, an information explosion) indicates that this topic will continue to be critically important. We argue that consumer choice is inherently constructive. Due to limited processing capacity, consumers often do not have well-defined existing preferences, but construct them using a variety of strategies contingent on task demands. After describing constructive choice, consumer decision tasks, and decision strategies, we provide an integrative framework for understanding constructive choice, review evidence for constructive consumer choice in light of that framework, and identify knowledge gaps that suggest opportunities for additional research. Copyright 1998 by the University of Chicago.
Several independent lines of research bear on the question of why individuals avoid decisions by postponing them, failing to act, or accepting the status quo. This review relates findings across several different disciplines and uncovers 4 decision avoidance effects that offer insight into this common but troubling behavior: choice deferral, status quo bias, omission bias, and inaction inertia. These findings are related by common antecedents and consequences in a rational-emotional model of the factors that predispose humans to do nothing. Prominent components of the model include cost-benefit calculations, anticipated regret, and selection difficulty. Other factors affecting decision avoidance through these key components, such as anticipatory negative emotions, decision strategies, counterfactual thinking, and preference uncertainty, are also discussed.
The article discusses how should policy-makers choose defaults regarding organ donors. First, consider that every policy must have a no-action default, and defaults impose physical, cognitive, and, in the case of donation, emotional costs on those who must change their status. Second, note that defaults can lead to two kinds of misclassification, willing donors who are not identified or people who become donors against their wishes. Changes in defaults could increase donations in the United States of additional thousands of donors a year. Because each donor can be used for about three transplants, the consequences are substantial in lives saved.
One of the main themes that has emerged from behavioral decision research during the past three decades is the view that people's preferences are often constructed in the process of elicitation. This idea is derived from studies demonstrating that normatively equivalent methods of elicitation (e.g., choice and pricing) give rise to systematically different responses. These preference reversals violate the principle of procedure invariance that is fundamental to all theories of rational choice. If different elicitation procedures produce different orderings of options, how can preferences be defined and in what sense do they exist? This book shows not only the historical roots of preference construction but also the blossoming of the concept within psychology, law, marketing, philosophy, environmental policy, and economics. Decision making is now understood to be a highly contingent form of information processing, sensitive to task complexity, time pressure, response mode, framing, reference points, and other contextual factors.
With the growing number, complexity, and importance of environmental problems come demands to include a full range of intellectual disciplines and scholarly traditions to help define and eventually manage such problems more effectively. Decision Making for the Environment: Social and Behavioral Science Research Priorities is the result of a 2-year effort by 12 social and behavioral scientists, scholars, and practitioners. The report sets research priorities for the social and behavioral sciences as they relate to several different kinds of environmental problems. © 2005 by the National Academy of Sciences. All rights reserved.
The idea of libertarian paternalism might seem to be an oxymoron, but it is both possible and desirable for private and public institutions to influence behavior while also respecting freedom of choice. Often people's preferences are unclear and ill-formed, and their choices will inevitably be influenced by default rules, framing effects, and starting points. In these circumstances, a form of paternalism cannot be avoided. Equipped with an understanding of behavioral findings of bounded rationality and bounded self-control, libertarian paternalists should attempt to steer people's choices in welfare-promoting directions without eliminating freedom of choice. It is also possible to show how a libertarian paternalist might select among the possible options and to assess how much choice to offer Examples are given from many areas, including savings behavior, labor law, and consumer protection.
Consumer choices concerning the selection, consumption, and disposal of products and services can often be difficult and are important to the consumer, to marketers, and to policy makers. As a result, the study of consumer decision processes has been a focal interest in consumer behavior for over 30 years (e.g., Bettman, 1979; Hansen, 1972; Howard & Sheth, 1969; Nicosia, 1966). One can infer from recent trends in the nature and structure of the marketplace that the importance of understanding consumer decision making is likely to continue. Rapid technological change, for instance, has led to multitudes of new products and decreased product lifetimes. In addition, new communications media, such as the World Wide Web, have made enormous amounts of information on options potentially available (Alba et al., 1997). Further, consumers are often asked to make difficult value tradeoffs, such as price versus safety in purchasing an automobile, environmental protection versus convenience in a variety of goods, and quality of life versus longevity in complex health care decisions.
How do consumers cope with the decisions they must make, some of which involve difficult tradeoffs and uncertainties? One approach to studying consumer decisions has been to assume a rational decision maker with well-defined preferences that do not depend on particular descriptions of the options or on the specific methods used to elicit those preferences. Each option in a choice set is assumed to have a utility, or subjective value, that depends only on the option.
This paper integrates themes from psychology and economics to analyze pro-environmental behavior. Increasingly, both disciplines share an interest in understanding internal and external influences on behavior. In this study, we analyze data from a mail survey of participants and non-participants in a premium-priced, green electricity program. Internal variables consist of a newly developed scale for altruistic attitudes based on the Schwartz norm-activation model, and a modified version of the New Ecological Paradigm scale to measure environmental attitudes. External variables consist of household income and standard socio-demographic characteristics. The two internal variables and two external variables are significant in a logit model of the decision to participate in the program. We then focus on participants in the program and analyze their specific motives for participating. These include motives relating to several concerns: ecosystem health, personal health, environmental quality for residents in southeastern Michigan, global warming, and warm-glow (or intrinsic) satisfaction. In a statistical ranking of the importance of each motive, a biocentric motive ranks first, an altruistic motive ranks second, and an egoistic motive ranks third.
The article discusses the factors influencing proenvironmental consumer behaviors and the policy implications of knowledge about these influences. It presents a conceptual framework that emphasizes the determining roles of both personal and contextual factors and especially of their interactions. The practical usefulness of the framework is illustrated by evidence of the interactive effects of information and material incentives – typical interventions in the personal and contextual domains, respectively. The author concludes that incentives and information have different functions, so that efforts focused on only one are sometimes misplaced; however, properly deployed, they can have synergistic effects on behavior. Some policy conclusions are drawn for consumer and environmental policy.
A default option is the choice alternative a consumer receives if he/she does not explicitly specify otherwise. In this article we argue that defaults can invoke a consumer's "marketplace metacognition," his/her social intelligence about marketplace behavior. This metacognitive account of defaults leads to different predictions than accounts based on cognitive limitations or endowment: in particular, it predicts the possibility of negative or "backfire" default effects. In two experiments, we demonstrate that the size and direction of the default effect depend on whether this social intelligence is invoked and how it changes the interpretation of the default.
The article discusses the factors influencing proenvironmental consumer behaviors and the policy implications of knowledge about these influences. It presents a conceptual framework that emphasizes the determining roles of both personal and contextual factors and especially of their interactions. The practical usefulness of the framework is illustrated by evidence of the interactive effects of information and material incentives – typical interventions in the personal and contextual domains, respectively. The author concludes that incentives and information have different functions, so that efforts focused on only one are sometimes misplaced; however, properly deployed, they can have synergistic effects on behavior. Some policy conclusions are drawn for consumer and environmental policy.
This article develops a conceptual framework for advancing theories of environ- mentally significant individual behavior and reports on the attempts of the author's research group and others to develop such a theory. It discusses defini- tions of environmentally significant behavior; classifies the behaviors and their causes; assesses theories of environmentalism, focusing especially on value-belief-norm theory; evaluates the relationship between environmental concern and behavior; and summarizes evidence on the factors that determine environmentally significant behaviors and that can effectively alter them. The article concludes by presenting some major propositions supported by available research and some principles for guiding future research and informing the design of behavioral programs for environmental protection. Recent developments in theory and research give hope for building the under- standing needed to effectively alter human behaviors that contribute to environ- mental problems. This article develops a conceptual framework for the theory of environmentally significant individual behavior, reports on developments toward such a theory, and addresses five issues critical to building a theory that can inform efforts to promote proenvironmental behavior.
As competition in the electric utility industry has become more widespread and federal legislation deregulating the utility industry more likely, utilities have become more concerned about actions they can take to help ensure the loyalty of their customers. National polls have, for 20 years, found majority preferences for renewable energy over other energy sources. This issue brief compiles and analyzes recent market research conducted by utility companies on customer interest in and willingness to pay for renewable electricity. Findings in the areas examined in this review are: Customers are favorable toward renewable sources of electricity, although they know little about them; Solar and wind are the most favored sources of electricity generation; Majorities of 52% to nearly 100% of residential customers said they were willing to pay at least a modest amount more per month on their electric bills for green power; their responses follow a predictable curve showing that percentages willing to pay more decline as cost increases. The residential market for green pricing is approximately 2% near program rollout at a $5/month price increment, and should increase slowly but steadily over time; Customers may view with favor, and be more willing to purchase electricity from, utilities that provide green power.
With many electricity markets around the world now open to retail competition, it is increasingly valuable to understand the attitudes, motivations and behaviour of residential electricity purchasers. Drawing upon two sets of survey results from an Ontario (Canada) community, this paper answers two questions. First, what ‘kinds’ of people are more or less likely to switch electricity supplier? Secondly, what motivates those who are more or less likely to switch electricity supplier? After answering these questions, the paper advances marketing strategies for new retail electricity suppliers and proposes business plans for established municipal electric utilities. Copyright © 2004 Henry Stewart Publications Ltd.
Behavioral decision research: A constructive processing perspective
This [textbook] helps establish important new links between environmental science and behavioral science. It develops a framework for addressing key questions about human behaviors that harm the environment, summarizes knowledge from psychology and related fields about these behaviors, and uses that knowledge to point the way to realistic solutions.
This book develops a framework for addressing these questions, drawing on behavioral theory, real world case studies, field experiments, and other evidence. Because its central focus is individual behavior, it draws most heavily on concepts from social, cognitive, and behavioral psychology. However, it puts behavior in the context of the economic, institutional, and policy forces that shape it and emphasizes arenas where individual action makes a real difference to the natural environment. The result is an interdisciplinary treatment, rooted in behavioral science but addressing practical issues of environmental policy.
The book is written at a level suitable for undergraduate students in psychology, social science, and environmental studies and science. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
This study gauges how different information disclosure policies impact consumer understanding, performance, and satisfaction during the choice of a deregulated electricity supplier, and it explores how the market share of each firm responds to different policies in a hypothetical market. Compulsory disclosure of detailed price and environmental attribute information yields high consumer satisfaction and minimizes most types of information processing errors. The implications for disclosure policy and firm-level market share are discussed.
The liberalization of electricity markets opens up new opportunities for electricity providers to differentiate their products along environmental characteristics. Due to considerable search and evaluation costs for the consumer, the success of green power products depends to a large degree on a professional communication strategy. Besides professional marketing, instruments like environmental labeling have attracted considerable attention. The present paper analyzes the fundamentals Of Voluntary, third-party eco-labeling of electricity products and compares different labeling approaches, which have been developed in Europe and in the US recently. We distinguish six major dimensions along which labeling schemes can differ and identify two main strategies to deal with the basic tradeoffs, correspondingly. Labeling concepts may either be simple, require low or medium environmental standards and strive for the support of at least one stakeholder group, Alternatively, eco-labels may judge a broad range of environmental impacts and integrate several stakeholder groups with opposing interests. Experiences show that labels of the first type can be set up quickly and have the advantage to set a standard early in the market. In the medium and long term, however, public awareness and potential criticisms may rise and rather simple eco-labeling schemes will have to be adapted. The paper finally discusses the prospects for a common European eco-labeling strategy.
Green power marketing—the act of differentially selling electricity generated wholly or in part from renewable sources—has emerged in more than a dozen countries around the world. Almost two million customers worldwide buy green power today. This paper reviews green power marketing activity in Australia, Canada, Japan, the US, and in a number of countries in Europe to gain an understanding of consumer demand for electricity generated from renewable sources. It also examines key factors that influence market penetration of green power products, such as product designs, pricing, incentives, marketing strategies, policies, and product certification.
This paper integrates themes from psychology and economics to analyze pro-environmental behavior. Increasingly, both disciplines share an interest in understanding internal and external influences on behavior. In this study, we analyze data from a mail survey of participants and non-participants in a premium-priced, green electricity program. Internal variables consist of a newly developed scale for altruistic attitudes based on the Schwartz norm-activation model, and a modified version of the New Ecological Paradigm scale to measure environmental attitudes. External variables consist of household income and standard socio-demographic characteristics. The two internal variables and two external variables are significant in a logit model of the decision to participate in the program. We then focus on participants in the program and analyze their specific motives for participating. These include motives relating to several concerns: ecosystem health, personal health, environmental quality for residents in southeastern Michigan, global warming, and warm-glow (or intrinsic) satisfaction. In a statistical ranking of the importance of each motive, a biocentric motive ranks first, an altruistic motive ranks second, and an egoistic motive ranks third.
We analyze US consumers’ demand for environmental attributes of deregulated residential electricity services using results from a survey designed to elicit consumers’ willingness to pay for such attributes and using results from a hedonic analysis of actual price premiums charged for green electricity in several deregulated markets. Survey results suggest that many population segments are willing to pay for decreased air emissions even if there is no alteration in fuel source. Furthermore, several groups are willing to pay significantly more when emissions reductions stem from increased reliance upon renewable fuels. The hedonic analysis suggests that several product features not considered in the survey help explain real price premiums, including fuel mix from newly created renewable generation capacity, Green-e certification, brand name and state of offer. While survey and hedonic results are not easily compared due to limitations of the survey, both point to similar values for key environmental attributes, though the survey results are likely to overstate actual willingness to pay. In sum, the results suggest that consumer driven purchases can, in part, support the future of renewable generation capacity in the United States, though reliance upon other policy alternatives may be needed if energy prices spike.
At first blush, Thaler and Sunstein seem to be proposing that voluntarily helping people to overcome or cope with their rash, ignorant, impulsive selves be called “libertarian paternalism.†Such semantics would only cause confusion and introduce new terminology for things already well served by ordinary language. Upon closer reading, however, we find that they maintain an unconventional distinction between coercive and non-coercive (or voluntary) action, while never making clear how they distinguish coercive from non-coercive action. I suggest that “libertarian paternalism†is really a depredation upon the very distinction between coercive and voluntary action.
Research in behavioral decision theory suggests that people use reference points as the basis for judging/comparing the value of decision alternatives, but there has been little research addressing how decision reference points are formed. This paper posits and empirically demonstrates a conceptual framework of the reference point formation process for buying decisions. The basic concepts in the framework are supported, and the resulting reference points are shown to influence choice in a manner consistent with prospect theory.
This paper analyzes the impact of automatic enrollment on 401(k) savings behavior. We have two key findings. First, 401(k) participation is significantly higher under automatic enrollment. Second, a substantial fraction of 401(k) participants hired under automatic enrollment retain both the default contribution rate and fund allocation even though few employees hired before automatic enrollment picked this particular outcome. This "default" behavior appears to result from participant inertia and from employee perceptions of the default as investment advice. These findings have implications for the design of 401(k) savings plans as well as for any type of Social Security reform that includes personal accounts over which individuals have control. They also shed light more generally on the importance of both economic and noneconomic (behavioral) factors in the determination of individual savings behavior. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Behavioral economists increasingly argue that violations of rationality axioms provide a new rationale for paternalism - to “de-bias” individuals who exhibit errors, biases and other allegedly pathological psychological regularities associated with Tversky and Kahneman’s (in Science 185:1124-1131, 1974) heuristics- and-biases program. The argument is flawed, however, in neglecting to distinguish aggregate from individual rationality. The aggregate consequences of departures from normative decision-making axioms may be Pareto-inferior or superior. Without a well-specified theory of aggregation, individual-level biases do not necessarily imply losses in efficiency. This paper considers the problem of using a social-welfare function to decide whether to regulate risk-taking behavior in a population whose individual-level behavior may or may not be consistent with expected utility maximization. According to the social-welfare objective, unregulated aggregate risk distributions resulting from non-maximizing behavior are often more acceptable (i.e., lead to a weaker rationale for paternalism) than population distributions generated by behavior that conforms to the standard axioms. Thus, psychological theories that depart from axiomatic decision-making norms do not necessarily strengthen the case for paternalism, and conformity with such norms is generally not an appropriate policy-making objective in itself.
In five studies, we measured the extent to which subjects weight moral product attributes in different response modes. We found that nonprice judgments such as likelihood of purchase ratings were more reflective of expressed moral attitudes than were pricing responses, and that holistic price evaluations were especially unlikely to reflect moral considerations. Post-task ratings confirmed the preference results, as did an experiment controlling for the influence of task goals. Our results have implications for compatibility theories of preference elicitation, the predictability of respondent ratings of attribute unacceptability, and the measurement of utilities for morally charged attributes. Copyright 2001 Academic Press.
How can anyone be rational in a world where knowledge is limited, time is pressing, and deep thought is often an unattainable luxury? Traditional models of unbounded rationality and optimization in cognitive science, economics, and animal behavior have tended to view decision-makers as possessing supernatural powers of reason, limitless knowledge, and endless time. But understanding decisions in the real world requires a more psychologically plausible notion of bounded rationality. In Simple heuristics that make us smart (Gigerenzer et al. 1999), we explore fast and frugal heuristics--simple rules in the mind's adaptive toolbox for making decisions with realistic mental resources. These heuristics can enable both living organisms and artificial systems to make smart choices quickly and with a minimum of information by exploiting the way that information is structured in particular environments. In this précis, we show how simple building blocks that control information search, stop search, and make decisions can be put together to form classes of heuristics, including: ignorance-based and one-reason decision making for choice, elimination models for categorization, and satisficing heuristics for sequential search. These simple heuristics perform comparably to more complex algorithms, particularly when generalizing to new data--that is, simplicity leads to robustness. We present evidence regarding when people use simple heuristics and describe the challenges to be addressed by this research program.
In this paper I have attempted to identify some of the structural characteristics that are typical of the "psychological' environments of organisms. We have seen that an organism in an environment with these characteristics requires only very simple perceptual and choice mechanisms to satisfy its several needs and to assure a high probability of its survival over extended periods of time. In particular, no "utility function' needs to be postulated for the organism, nor does it require any elaborate procedure for calculating marginal rates of substitution among different wants.