6 January 2016

The power of the nudge to change our energy future

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Sebastian Berger, Assistant Professor of Organization at the University of Bern, writes in the Scientific American how the default option, a simple change based on psychology, will increase use of renewable energy.

In a recent paper, Berger together with Felix Ebeling of the University of Cologne, tested whether defaults could nudge consumers into choosing a green energy contract over one that relies on conventional energy.

Half of our households were guided through decision screens in which they actively had to opt into green energy. The other half of our households was guided through identical decision screens, but we had pre-selected the same button as above. The difference between the experimental conditions is minimal. Households had to actively “opt-in” in half of the cases or actively “opt-out” in the other half, simply by (un-)clicking the button.

The results were striking. Using the opt-in rule, merely 7% of households purchased a green energy contract. Using the “opt-out” rule, however, increased participation tenfold to roughly 70%.

Berger concludes: “This is an important result because it tells us that subtle, non-coercive changes in the decision making environment [or “decision architecture”] are enough to show substantial differences in consumers’ preferences in the domain of clean energy.”

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