18 September 2009

Peer pressure and other pitches

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Michael Sanserino reports in the Wall Street Journal on the latest applications of insights in behavioural economics:

“More businesses are using behavioral economics to appeal to customers, seeking to capitalize on the notion that people don’t always act in their economic self-interest.

Behavioral economics is popular among academics, particularly since two of its early theorists won the 2002 Nobel Prize in economics. Now businesses are applying the concepts in new ways.

Since April 2008, the Sacramento Municipal Utility District has told 35,000 customers in their monthly bills how their energy use compares with neighbors’, and with the district’s most-efficient customers. Customers who received the additional information cut their energy use by 2%, compared with a similar group of users who didn’t get comparison data.”

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