9483
AiS

Session 8a

Joshua
Foster



Agenda

  1. MobLab Simulation: Let's go fishing!
  2. Case: OPOWER: Increasing Energy Efficiency through Normative Influence (A).
  3. Group problem: implementing a behavioural strategy for OPOWER.

Simulation instructions.

  • The situation: there is an open-access fishery (i.e. a lake).
  • What you do: choose how many fish to catch out of the lake.
  • Your objective: strategically fish the lake in a payoff-maximizing way.

How it works.

  • Everyone is randomly placed in groups of 4 on a lake with 160 fish.
  • There will be five rounds of fishing. In each round, you will privately decide how many fish to catch.
  • A round ends when either (1) everyone decides to stop fishing or (2) time runs out (45s per round).
  • When the round ends, the remaining fish stock doubles (up to 160).

Determining your payoff.

  • Your payoff is equal to the number of fish you caught, plus your share of the final round's fish stock.
  • Example: suppose you caught a total of 85 fish and the final round had fish stock of 30.
  • Then your payoff is $85+\frac{30\cdot 2}{4}=100$.

Questions?

What was your fishing strategy?

Tragedy of the Commons.

When a common resource is over-utilized because it is rivalrous and non-excludable.

Real-world examples?

How can climate change be understood as a Tragedy of the Commons?

What are some standard economic approaches to managing climate change?

What is OPOWER's innovation?

Descriptive norm.

Whether the behaviour was present.

Injunctive norm.

Whether the behaviour was socially appropriate.

How does OPOWER engage with these behavioural factors to reduce energy use?

Problem: the "magnetic middle".

Mean reversion occurs when otherwise uninformed individuals learn they are better than average. Examples:

  • Students learn they are below-average partiers.
  • Energy users learn they are below-average consumers.

"But there was a way to avoid this phenomenon. Studies showed that layering an injunctive norm on top of the descriptive norm was effective in curtailing [this effect]. The key was to give individuals data on their behavior relative to the average and to provide reinforcement or approval to those who had already embraced the promoted behavior."

The task.

Design a program of layering an injunctive norm with a descriptive norm for energy usage in a standard office space.

  • Different norms than for households.
  • What features will drive (desireable) changes in behaviour?
Group 1 Milos Masnikosa Christina Gucciardi Alexis Gantous Andrew Shepherd Mayank Ahuja Ismyal Khan Syed Murtaza Nadeem
Group 2 Runfeng Li Akshat Singh Suyash Singh Mike Hockin Elvin Yu Kaanshika Mittal Jennifer Hsin
Group 3 Akshay Rewale Smarth Narula Ross Ferguson Michael Saunders Yashodhan Sule Tunmise Ajiboye Shiva Sankar
Group 4 Max Welyhorsky Siddhanth Khanvilkar Bani Sehgal Mackenzie Fulton Karanvir Singh Kaartikeya Pandey
Group 5 Natasha Shew Aakriti Gupta Gabrielle Stadler Zhaokun Du Abhimanyu Sheoran Eric Parr
Group 6 Noah Suissa Matthew Grilli Sachin Mohanty Rawaiz Sheikh Shashank Rusia Nikola Lapenna
Group 7 Imaiya Ravichandran Annie Zhang Daniel Zhu Feng Xu Atanu Sahoo Evelyn Vanderhoof
Group 8 Calvin Jiang Lin Ma Kai Hu Adamo Sansalone Josiah Dueck Gagandip Grewal

Small Group Task

Work with your group to design a workplace intervention that applies descriptive and injunctive norms to reducing energy consumption.

Key takeaways.

Some markets suffer from self-inflicted failures.

  1. Tragedy of the commons for finite resources.
  2. Free-riding for "infinite" resources.

Non-pecuniary incentives are important considerations when designing markets and policies.