The recent book, Nudge, is a must read if you are interested in how organizations and businesses can structure choices to help consumers make good decisions. The book is a deeper treatment of the concept of "libertarian paternalism," that the authors initially discussed in a research paper and later in an opinion piece for the LA Times. In essence, the concept is that "choice architects" (the people who design the way consumers are presented with choices) can offer options in a way such that consumers are more likely to choose the "best" alternative.
While the concepts apply to many areas from personal savings to diets, there are many applications to sustainability:
- Smiles, Frowns and Saving Energy -- Feedback changes behavior. They discuss a study conducted by an electric utility in California where 300 households were provided feedback on how their energy usage compared to that of their neighbors. The families with above average usage reduced their usage based upon the feedback. When the numerical feedback was coupled with a "frown face" emoticon, consumers reduced their energy usage even further. Perhaps more interestingly, consumers with below average usage actually increased their usage with a purely numerical comparison, but remained low when presented with a smile emoticon.
- Bigger Packaging = Bigger People -- Cues are relative. All else being equal, people eat more popcorn when they have large containers than they do out of small containers. Many manufacturers have reduced package sizes... have people reduced their consumption as a result? Do people buy the products more frequently? Has ratio of the amount of packaging to the amount of product actually increased as a result?
- Econs vs. Humans -- People don't always act like we expect from a purely economic analysis. Economic motivations can work, but only when the information is salient to those making decisions. People might set their thermostats at a lower temperature in the winter if the thermostat read a $/day figure in addition to a raw temperature.
The book touches on many of the areas that I have been commented on in the past. Like this and this. You should also check out Thaler and Sunstein's blog.
