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1) Google’s PowerMeter is dead. Long live Google’s PowerMeter. Thoughts on why it didn’t take off here.

2) Choice overload at a young age. (See page 4 and markers)

3) Morningstar on “The Benefits of a Financial Nudge

4) FICO scores for medical adherence?

5) Early prognosis for tax receipt. It doesn’t much change how Americans feel about paying their taxes.

6) The Winner’s Curse in its most basic form: Spending $28 for a $25 gift card as part of an Ebay auction.

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Prius owners.

Snapshot, the usage-based automobile insurance program, offered by Progressive calculates rates based on three criteria that are largely out of a driver’s control. Mileage traveled, time of day you drive, and speed of braking. That last category is an opportunity for Prius owners, old and new, to showcase the habits they’ve picked up while paying attention to the car’s feedback display. Among Prius drivers, the display has sparked changes in driving behavior out of a concern for saving gas.

“Once you start making fuel consumption more visible, you have something that comes to the forefront of people’s minds instead of lurking in the background,” said Sarah Darby, a researcher who studies energy feedback technologies at the University of Oxford’s Environmental Change Institute. The monitors “show the consequences of your actions,” she says. “This gives you feedback that alters actions, and encourages you to try and improve things.”

In the Prius and other hybrids with energy displays, drivers can see what specific actions mean for their mileage. In some ways, it is like children learning to color in between the lines, with the teacher standing over their shoulders. Aggressive acceleration after a stoplight — that’s bad. The monitor will show mpg going down. Suddenly slamming the brakes — also bad. Coasting to a stop — good. That tactic lets the engine shut down, saving gas.

Looks like insurance rates could be an added bonus.

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1) Cass Sunstein writes in the Wall Street Journal about new money-saving regulations.

2) Disney creates scarcity with its content.

3) New MPG labels for cars will include information about greenhouse gases.

4) A call for the Indian government to think about behavioral economics.

5) Traffic light interest rates – A heuristic for microfinance loans.

6) The U.K. government wants to make digital delivery a default. Hat tip Amol Agrawal.

7) Choice Architecture in the Wild Pt. 12 by Jonathan McDonald.

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The right message does little good if it doesn’t reach anyone. Here a creative conservation message from the South African utility company Eskom. The billboard looks great in this photo, but does it work well out in the world? Hard to tell from here since the origins of this image are unknown. But there are reasons to be skeptical. The effect of the message only resonates at night. That’s half a day reaching people – lost (it would be great during an Alaskan winter). It’s hard to tell where this billboard is, but if it’s on a road for day time commuters, again, the effect is lost. The sign doesn’t look to be in a high-density urban location where it could at least benefit from nighttime foot traffic.

Bottom line: This message probably works better as a photo in a subway station than as an actual billboard on a country road. So let’s hope it’s not real.

Hat tip: Hebert Samuel and Brian Keene

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1) Asked about what scientific concept would improve everyone’s cognitive toolkit, “Richard Thaler proposes attaching the word “aether” to substitute for any variable that is asserted rather than proven — so, “business aren’t investing because of aether,” as opposed to “businesses aren’t investing because of uncertainty,” writes Ezra Klein.

2) French government develops strategies for “green nudges.” Pdf of paper is here. Hat tip: Olivier Oullier

3) Progress Energy in North Carolina will begin showing people how their energy usages compares with that of their neighbors. Hat tip: Environmental Economics.

4) Impulse saving in India (at the end of the article).

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Homeowners on Tidy St. in Brighton, U.K., are trying to save energy. Instead of simply monitoring their own use, they’ve enlisted a local artist to chart the block’s success in the middle of the street.

Residents who volunteered for a new energy-saving initiative have been given electricity meters so they can monitor their daily energy use, and identify which devices are using the most power, and when.

For the past three weeks, they have been entering daily meter readings on, to build up a picture of each household’s energy use.

Once people started measuring – 17 of the street’s 52 households signed up straight away – local street artist Snub was commissioned to paint the street’s average energy use against the Brighton average in a graph on the road outside their homes.

Over the first three weeks, energy consumption dropped by 15 percent.

Hat tips: Donnie Hall, Tiago Peixoto.


1) Banking interface inspired by behavioral economics.

2) Smart commentary from Modeled Behavior on the idea of giving people vouchers to fight obesity.

3) A “commitment app.” Promise to do X. Announcement about X sent to friends. App verifies promise. Announcement about doing X sent to friends.

4) Forbes columnist: Opower utility bill “one of the most important energy innovations of the last decade.”

5) IPA puts out new behavioral economics pamphlet with 9 case studies. (Non-members have to buy the pamphlet.)

6) What’s your appetite for risk?

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Assorted links

1) Budgeting is like dieting. You don’t follow through on your plans.

2) Florida prison currency: Honey buns are the new cigarettes.

3) Maybe the nudge work in the U.K. should be more low-key.

4) Top 10 mistakes in behavior change from the Stanford Persuasive Tech Lab. Hat tip: Joseph Clemens.

5) Smartmeters face a public backlash in California.

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A fascinating survey of people asked them about the perceived energy savings from a range of environmental behaviors (turning off lights, driving a more fuel efficient car, using energy saving appliances, etc.), and compared their answers to the actual energy savings of those same behaviors. One main takeaway from an online report about the survey is that people don’t know much about what saves energy. That’s sort of true, but not quite. As the authors of study (ungated here) write:

For a sample of 15 activities, participants underestimated energy use and savings by a factor of 2.8 on average, with small overestimates for low-energy activities and large underestimates for high-energy activities.

Why did they make these estimation mistakes? Why did they consistently not know that actions like tuning up a car twice a year produces a much bigger conservation impact than driving 60 mph instead of 70 mph for one hour? One answer is anchoring. The study’s survey offered respondents the reference point of an incandescent light bulb, which was described as using 100 units of energy over a one hour period. From there, respondents adjusted upward for other behaviors and appliances, knowing they used more energy, but not knowing how much more.

The authors argue that the incandescent bulb is a common reference point for most people today. That sounds fair. The broader lesson is this: If you’re like most people you don’t know a lot about how much energy various behaviors and appliances use. You do have a reference point, though, probably related to some action or appliance you use commonly and may have read something about. Whatever that action is, it’s probably affecting your ideas for reducing your energy usage, albeit not as much as you think.

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Here are two questions:

1) How much was your electric bill last month?

2) Why did you pay that much (or that little)?

If you are like most people, you probably have a vague idea about the answer to the first question, but the second one has you stumped. Sure, you may remember you ran the air conditioner a bit more (or a bit less) last month because it was hotter (or cooler) than normal. Maybe you were on vacation, so your house sat empty and dark. Or you got a huge new state-of-the-art home theater set and you’ve spent the last two weeks watching every favorite movie in beautiful 3-D.

The point is you have some educated guesses. What you don’t have are any facts or data to validate them. Not to mention, the only fact you do have—the total bill amount—comes a month after you made all your decisions, leaving your imperfect memory to fit the pieces back together. There may also be a problem with the guesses themselves. They are limited by what you know about energy use. So you know that running an air conditioner is expensive, but you don’t know how much more money it’s costing you to keep your house at 70 degrees instead of 75. Your focus on the air conditioner has left you blind to the costs of running your dishwasher and washing machine in the middle of the day.

The result is that every day, millions of Americans make decisions about energy that could be much better. By introducing time of use rate structures and empowering consumers with the type of knowledge just mentioned, utility companies have the potential to help people save money by encouraging off-peak usage of high consumption devices, like washers, dryers, air conditioners, and plug-in hybrid electric vehicles (PHEVs). In a yearlong study by the U.S. Department of Energy, smart grid customers reduced peak consumption by up to 15 percent, and overall consumption by up to 10 percent.

A smart grid is basically an old electricity grid with a bigger brain. If old grids were like television (powerful but static), the smart grid is like the internet (powerful and interactive). It uses technology to allow appliances in a home or office to talk to power company stations and vice versa. Behavioral economics can play a major role in the smart grid’s success by changing how people relate to the energy they use.

In the area of energy consumption, one immediate area where improvement could be made is through better feedback about energy usage and its consequences. As many energy researchers have noted, one of the fundamental problems to smarter decision making is that energy is invisible. It’s difficult to tell when you are using a lot of energy and why. Feedback mechanisms that make energy visible and understandable are likely to produce the greatest successes in changing individual energy habits for the better.

One such story of experimenting with innovative feedback mechanisms (told in Nudge) comes from Southern California, where an energy company gave people a ball called the Ambient Orb that glowed red when homeowners were using a lot of energy, and green when they were using very little. The effect of such a simple, but powerful and clear signal, was dramatic. Within a few weeks, Orb users had reduced their peak energy consumption by 40 percent.

With a few creative tweaks, the Orb might have cut down on energy use further. In Nudge, Thaler and Sunstein wondered what would have happened if the Orb played a selection of a user’s least favorite songs if her energy consumption went past some pre-set level. Might one person’s new energy conservation habits spread to select friends and family if information about their household usage was transmitted to their Facebook page?

Notice also what a crude device the Ambient Orb is. It displays no information about what machines are hogging energy. With only two colors, it tells users nothing about how much energy they are using or saving beyond the basic message of “more than usual” and “less than usual.” And it offers no information to users about the benefits of turning up the thermostat or washing dishes by hand. Yet, even with those limitations, to cut peak energy consumption by 40 percent is no small feat.

From a decision-making perspective, the feedback potential of smart grid technologies like smart meters, smart energy panels, and smart appliances is enormous. Not only does it offer consumers new information, but it also enables them to experiment with new behaviors to see which ones can save money without completely upending their current habits. The development of these technologies will have to cognizant of how consumers make energy decisions. Simply dumping huge amounts of new information in consumers’ laps is unlikely to be a great help. The great challenge will be in designing systems that provide rich amounts of energy information in ways that are as easy to understand and act upon as the Ambient Orb. If successful, you’ll know why you paid what you did last month and why you’ll pay less this next month.

The post was adapted from a post that appeared on, a blog about energy and smart grid technology that is affiliated with General Electric.

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