{"id":1797,"date":"2011-01-14T11:06:07","date_gmt":"2011-01-14T16:06:07","guid":{"rendered":"http:\/\/www.decisionsciencenews.com\/?p=1797"},"modified":"2011-01-14T11:06:07","modified_gmt":"2011-01-14T16:06:07","slug":"the-limits-of-behavioral-economics","status":"publish","type":"post","link":"https:\/\/www.decisionsciencenews.com\/?p=1797","title":{"rendered":"The limits of behavioral economics"},"content":{"rendered":"

BEHAVIORAL ECONOMICS AS A COMPLEMENT, NOT A SUBSTITUTE<\/p>\n

\"\"<\/a>
\nSisyphus finds some nudges harder than others<\/em><\/p>\n

George Loewenstein<\/a> and Peter Ubel<\/a> published this Op Ed in the New York Times entitled Economics Behaving Badly<\/a>. It is not every day that prominent behavioral economists emphasize the limits of what they do, so we thought they deserved special mention here, (even if we are terribly late getting to this).<\/p>\n

The article mentions some of the less-whelming behavioral economic interventions of late, and stresses that babies and bathwater need to be identified when rethinking existing systems.<\/p>\n

Here is a representative quote:<\/p>\n

Behavioral economics should complement, not substitute for, more substantive economic interventions. If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioral economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.<\/p>\n

But that\u2019s the most it can do. For all of its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our nation\u2019s challenges.<\/p><\/blockquote>\n

They mention that a program designed to reduce energy consumption by revealing neighbor’s consumption had modest effects of 1 to 2.5 percent. Since then, a working paper A working paper entitled Energy Conservation ‘Nudges” and Environmentalist Ideology: Evidence from a Randomized Residential Electricity Field Experiment<\/a> by Dora L. Costa by Matthew E. Kahn, based on the same on the same study suggests that the effect can backfire as a function of the audience. Here’s the abstract:<\/p>\n

“Nudges” are being widely promoted to encourage energy conservation. We show that while the electricity conservation \u201cnudge\u201d of providing feedback to households on own and peers’ home electricity usage works with liberals, it can backfire with some conservatives. Our regression estimates predict that a registered liberal who pays for electricity from renewable sources, who donates to environmental groups, and who lives in a liberal neighborhood reduces consumption by 3.1 percent in response to this nudge. A registered conservative who does not pay for electricity from renewable sources, who does not donate to environmental groups, and who lives in the bottom quartile liberal neighborhood increases consumption by 0.7 percent.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

BEHAVIORAL ECONOMICS AS A COMPLEMENT, NOT A SUBSTITUTE Sisyphus finds some nudges harder than others George Loewenstein and Peter Ubel published this Op Ed in the New York Times entitled Economics Behaving Badly. It is not every day that prominent behavioral economists emphasize the limits of what they do, so we thought they deserved special […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[16],"tags":[159,20,27,29,36],"class_list":["post-1797","post","type-post","status-publish","format-standard","hentry","category-ideas","tag-behavioral-economics","tag-decision-making","tag-economics","tag-nudges","tag-psychology"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4LKj-sZ","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/posts\/1797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1797"}],"version-history":[{"count":6,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/posts\/1797\/revisions"}],"predecessor-version":[{"id":2296,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=\/wp\/v2\/posts\/1797\/revisions\/2296"}],"wp:attachment":[{"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.decisionsciencenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}