Naiveté, projection bias, and habit formation in gym attendance

We implement a gym-attendance incentive intervention and elicit subjects' predictions of their postintervention attendance. We find that subjects greatly overpredict future attendance, which we interpret as evidence of partial naiveté with respect to present bias. We find a significant postintervention attendance increase, which we interpret as habit formation, and which subjects appear not to predict ex ante. These results are consistent with a model of projection bias with respect to habit formation. Neither the intervention incentives, nor the small posttreatment incentives involved in our elicitation mechanism, appear to crowd out existing intrinsic motivation. The combination of naiveté and projection bias in gym attendance can help to explain limited take-up of commitment devices by dynamically inconsistent agents, and points to new forms of contracts. Alternative explanations of our results are discussed

Take all You Want, but Eat all You Take: Effectiveness of a Financial Incentive on Individual Food Waste

This study investigates the effect of a fixed financial incentive on students’ food consumption and food wastage behavior. We hypothesize that students will change their behavior under financial incentive with respect to the (1) amount of food taken and (2) associated plate waste. To test our hypothesis, we conduct a randomized control trial experiment at an all-you-can-eat university dining hall, and employ digital photography method to collect daily consumption and waste data for each student. We estimate the amount of food taken on the plate and the amount of plate waste to the nearest 10%. The results indicate the financial incentive was instrumental in increasing the likelihood of students cleaning their plates (reduction in waste). However, we find no significant decrease of the amount of food taken on the plate by the students. These results are encouraging as they provide a foundation for policymakers implementing and evaluating policies to reduce food waste

The Dark Side of Positive Social Influence

Social influence in the form of social norms has been widely used to transform behaviors, and is argued to be especially efficacious in the context of health related activities. However, can such externally induced compliance produce negative outcomes? When individuals feel compelled to conform to the behavior of the majority, does it lead to an unexpected backfire effect? We conducted a randomized field experiment of more than 10,000 individuals for a two-month period on an online physical activity community to examine if there is a dark side to social influence. We studied the effect of social norms on users’ goal setting and goal achievement behavior. While social influence increases the rate of goal setting, strikingly, we also observe a dark side to social influence in that such influence yields lower rates of goal achievement. Our findings have important implications for the design of interventions in the context of mHealth technologies

Do The Effects of Social Nudges Persist? Theory and Evidence from 38 Natural Field Experiments

This study examines the mechanisms underlying long-run reductions in energy consumption caused by a widely studied social nudge. Our investigation considers two channels: physical capital in the home and habit formation in the household. Using data from 38 natural field experiments, we isolate the role of physical capital by comparing treatment and control homes after the original household moves, which ends treatment. We find 35 to 55 percent of the reductions persist once treatment ends and show this is consonant with the physical capital channel. Methodologically, our findings have important implications for the design and assessment of behavioral interventions

Sunspots that matter: The effect of weather on solar technology adoption

This paper tests for the presence of behavioral biases in household decisions to adopt solar photovoltaic installations using exogenous variation in weather. I find that residential technology uptake responds to exceptional weather, defined as deviations from the long-term mean, in line with the average time gap between decision-making and completion of the installation. In particular, a one standard deviation increase in sunshine hours during the purchase period leads to an approximate increase of 4.7% in weekly solar PV installations. This effect persists in aggregate data. I consider a range of potential mechanisms and find suggestive evidence for projection bias and salience as key drivers of my results.I would like to thank Jerome Adda, Stefan Ambec, Bryan Bollinger, Sylvain ChabeFerret, Antonia Diaz, Andreas Gerster, Ken Gillingham, Sebastian Houde, Andrea Ichino, Martin Kesternich, Matt Kotchen, Matt Neidell, Francois Salanie, Fabiano Schivardi, Joe Shapiro, and seminar participants at the Atlantic Workshop on Energy & Environmental Economics, EMEE, Energy and Climate Conference Toulouse, FAERE, IAERE, Northeast Workshop on Energy Policy & Environmental Economics, Workshop on Economic Theories & Low-Carbon Policies, World Congress of the Econometric Society, European University Institute, Goteborg University, RWI Essen, Toulouse School of Economics, Yale University, and ZEW Mannheim for helpful comments and suggestions. I am also indebted to the Editor and two anonymous referees for their insightful feedback. This project has received funding from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation program (Grant Agreement No 772331). A previous version of this article has been circulated under the name "Projection Bias in Solar Electricity Markets". Open Access funding provided thanks to the CRUE-CSIC agreement with Springer Nature

Behavioral Biases in Marketing

Psychology and economics (the mixture of which is known as behavioral economics) are two fundamental disciplines underlying marketing. Various marketing studies document the non-rational behavior of consumers, even though behavioral biases might not always be consistently termed or formally described. In this review, we identify empirical research that studies behavioral biases in marketing. We summarize the key findings according to three classes of deviations (i.e., non-standard preferences, non-standard beliefs, and non-standard decision-making) and the marketing mix instruments (i.e., product, price, place, and promotion). We thereby introduce marketing researchers to the theoretical foundation of and terminology used in behavioral economics. For scholars from behavioral economics, we provide ready access to the rich empirical, applied marketing literature. We conclude with important managerial implications resulting from the behavioral biases of consumers, and we present avenues for future research

Healthy Climate, Healthy Bodies: Optimal Fuel Taxation and Physical Activity

Passenger transport has significant externalities, including carbon emissions and air pollution. Public health research has identified additional social gains from active travel, due to the health benefits of physical exercise. Per mile, these benefits greatly exceed the external costs from car use. We introduce active travel into an optimal fuel taxation model and characterize analytically the second-best optimal fuel tax. We find that accounting for active travel benefits increases the optimal fuel tax by 44% in the USA and 38% in the UK. Fuel taxes should be implemented jointly with other policies aimed at increasing the uptake of active travel