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Elke U. Weber, Columbia University Overcoming Barriers to Smart Grids & New Energy Services UT Austin Interdisciplinary Energy Conference, April 7-8, 2011 Smart Grid, Smart Decisions?

Smart Grid, Smart Decisions?

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Smart Grid, Smart Decisions?. Elke U. Weber, Columbia University Overcoming Barriers to Smart Grids & New Energy Services UT Austin Interdisciplinary Energy Conference, April 7-8, 2011. If you build it, they may not come…. Barriers to Behavior Change Information Deficits - PowerPoint PPT Presentation

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Page 1: Smart Grid,  Smart Decisions?

Elke U. Weber, Columbia University

Overcoming Barriers to Smart Grids & New Energy Services

UT Austin Interdisciplinary Energy Conference, April 7-8, 2011

Smart Grid, Smart Decisions?

Page 2: Smart Grid,  Smart Decisions?

If you build it, they may not come… Barriers to Behavior Change

Information Deficits Attention Deficits Motivation Deficits

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Page 3: Smart Grid,  Smart Decisions?

Information Deficits Metrics matter

“Carbon footprint” metric has created new goals

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Page 4: Smart Grid,  Smart Decisions?
Page 5: Smart Grid,  Smart Decisions?

Information Deficits Metrics needed

“Carbon footprint” metric created new goals

Timely feedback crucial for learning Desire to improve a powerful goal Real-time feedback one of the addictive

properties of video games

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Page 6: Smart Grid,  Smart Decisions?

Attention Deficits Finite attention requires selectivity

Selectivity makes us myopic Focus on status quo Framing outcomes as gains or losses

Relative comparisons Loss aversion

Present bias for intertemporal decisions Outcomes (cost savings) in the future are disproportionately

discounted

(Smart meter) info & feedback displays Provide understandable “units”

kWs vs. # of 100W incandescent lightbulbs Facilitate relative comparisons

Improvements relative to last month, last year, best neighbor, etc.

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Page 7: Smart Grid,  Smart Decisions?

Motivation Deficits Status-quo bias

Inertia, risk aversion, loss aversion Biased argument recruitment (Query Theory)

Insufficient trust In companies/utilities, government agencies

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Page 8: Smart Grid,  Smart Decisions?

Multiple Ways of Making Decisions

Decisions get made in qualitatively different ways (Weber & Lindemann, 2007) “by the head” calculation-based decisions “by the heart” emotion-based decisions “by the book” rule-based decisions

Page 9: Smart Grid,  Smart Decisions?

Behavior change with calculation-based decisions

Uphill battle many decision biases will work against you

Discounting, loss aversion, status-quo biases

Make environmentally-responsible and socially-desirable options the default (Johnson & Goldstein, 2003; Thaler & Sunstein, 2008) E.g., in building codes, energy choices

Prime social goals Apollo-8 image of planet earth Use of group settings to communicate information

Page 10: Smart Grid,  Smart Decisions?

Behavior change with emotion-based decisions

Tempting to scare people into “right” behavior

Problematic for at least two reasons Finite pool of worry

Increase in worry about one hazard decreases worry about other hazards (Weber, 1997)

Single action bias Tendency to engage in single corrective action (Weber,

2006) Yet, most environmental problems require multiple and

sustained responses

Page 11: Smart Grid,  Smart Decisions?

Behavior change with rule-based decisions

Much behavior driven by habits based on past calculations or internalized rules

Create new habits, by following new rules Respected authority to issue new rule

“What would Jesus do?” Behavior prescriptions need to be concrete

“What would Jesus drive?” Capitalize on social observation and imitation

by having celebrities model desired behaviors “What does Angelina drive?”

Page 12: Smart Grid,  Smart Decisions?

Conclusions

Human cognitive and emotional limitations present challenges, but also opportunities

Preferences are malleable, for better or worse Goals can be primed Choice defaults and attribute labels can direct

attention Most effective mode(s) of learning and decision

making can be invoked

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Recommendations Introduce new mental accounts and metrics

to focus attention on environmental goals and to measure progress

Provide information about energy use in experiential ways direct or in form of simulations

Shape decision environment Use of environmentally responsible defaults Get people to evaluate environmentally responsible choice

options first Use group decision settings to prime social and collective

goals Social learning and imitation to modify undesired automatic

behavior

Page 14: Smart Grid,  Smart Decisions?

Revision of Conference Announcement

A combination of socioeconomic, psychological, technological, and legal barriers sometime impede deployment of smart grid systems. The barriers include information gaps, insufficient consideration of consumer psychology, insufficient trust in utilities, capital constraints, poor pricing methods, and outdated laws.

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References Johnson EJ, Goldstein D. 2003. Do defaults save lives? Science 302:1338-9

Thaler RH, Sunstein CR. 2008. Nudge : improving decisions about health, wealth, and happiness. New Haven: Yale University Press.

Weber, E. U. & Johnson, E. J. (2009). Mindful judgment and decision making. Annual Review of Psychology, 60, 53-86.

Weber, E. U. & Lindemann, P. G. (2007). From intuition to analysis: Making decisions with our head, our heart, or by the book. In: H. Plessner, C. Betsch & T. Betsch (Eds.), Intuition in judgment and decision making (pp. 191-208). Mahwah, NJ: Lawrence Erlbaum.

Weber, E. U. (1997). Perception and expectation of climate change: Precondition for economic and technological adaptation. In M. Bazerman, D. Messick, A. Tenbrunsel, & K. Wade-Benzoni (Eds.), Psychological Perspectives to Environmental and Ethical Issues in Management (pp. 314-341). San Francisco, CA: Jossey-Bass.

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