Framing and stakes: A survey study of decisions under uncertainty

Using a survey study of 261 decisions under uncertainty, we explore the factors that explain risk taking behavior and those that predict the importance of a decision. We also examine the relationship between framing and status quo, the similarity between monetary and non-monetary decisions, as well as the similarities and differences among our three subject groups (Undergraduates, MBAs and Executives). We find that framing, domain, and probability of success have a strong influence on the probability of taking risks. Other factors, such as group, importance of a decision, and whether the consequences are monetary or not, do not seem to influence risk attitudes. Our analysis of importance of a decision highlights the frequency with which a decision is taken as a key variable. Our results suggest that the cumulative effects of unimportant and frequent decisions are greater than the cumulative effects of very important and infrequent decisions.Decision making under uncertainty; Framing; Importance and frequency of decisions;

Harmful Freedom of Choice: Lessons from the Cellphone Market

This article focuses on the relationship between provider and customer, specifically on the complexity of available contracts in the cellphone market and the ways this complexity might be harmful to consumers. This article aims to elucidate the issues, fleshing them out both as a general phenomenon and as a specific implementation in the cellphone context. The aim is not to provide ultimate solutions, but to show the directions these solutions might take and the difficulties involved

A DECISION SUPPORT SYSTEM DESIGN TO OVERCOME RESISTANCE TOWARDS SUSTAINABLE INNOVATIONS

The concept of sustainability has been acknowledged as one of the central and most important issues of our time. However, technological innovations which provide a more sustainable way of living, for instance electric cars, are not always welcomed with open arms by consumers but often resisted at the beginning. As such, human resistance behavior can be explained as an interplay of different personality traits that favour the status quo. In this study, a decision support system design is introduced which bases on the concept of digital nudging that addresses innovation resistance on an individual’s cognitive level by de-biasing innovation trial decision-making. An experimental pre-study is conducted to test the influence of different DSS modifications on the selection of electric cars in an online rental car booking scenario. First results show that DSS which set sustainable innovations as default option have a significantly positive effect on their trial probability while priming consumers towards electric car trial has no significant effect

The Role of Behavioural Economics in Energy and Climate Policy

This article explores how behavioural economics can be applied to energy and climate policy. We present an overview of main concepts of behavioural economics and discuss how they differ from the assumptions of neoclassical economics. Next, we discuss how behavioural economics applies to three areas of energy policy: (1) consumption and habits, (2) investment in energy efficiency, and (3) provision of public goods and support for pro-environmental behaviour. We conclude that behavioural economics seems unlikely to provide the magic bullet to reduce energy consumption by the magnitude required by the International Energy Agency's “450” climate policy scenario. However it offers new suggestions as to where to start looking for potentially sustainable changes in energy consumption. We believe that the most useful role within climate policy is in addressing issues of public perception of the affordability of climate policy and in facilitating the creation of a more responsive energy demand, better capable of responding to weather-induced changes in renewable electricity supply