
Operations, Information and Decisions Papers
Document Type
Journal Article
Date of this Version
9-2014
Publication Source
Journal of Consumer Policy
Volume
37
Issue
3
Start Page
397
Last Page
411
DOI
10.1007/s10603-013-9251-z
Abstract
Utilizing theory and empirical insights from psychology and behavioural economics, this paper examines individuals’ cognitive and motivational barriers to adopting climate change adaptation and mitigation measures that increase consumer welfare. We explore various strategies that take into account the simplified decision-making processes used by individuals and resulting biases. We make these points by working through two examples: (1) investments in energy efficiency products and new technology and (2) adaptation measures to reduce property damage from future floods and hurricanes. In both cases there is a reluctance to undertake these measures due to high and certain upfront costs, delayed and probabilistic benefits, and behavioural biases related to this asymmetry. The use of choice architecture through framing and the use of default options coupled with short-term incentives and long-term contracts can encourage greater investment in these measures.
Keywords
Climate change, decision processes, behavioural economics, energy efficiency, mitigation and adaptation measures, choice architecture
Recommended Citation
Kunreuther, H. (2014). Aiding Decision Making to Reduce the Impacts of Climate Change. Journal of Consumer Policy, 37 (3), 397-411. http://dx.doi.org/10.1007/s10603-013-9251-z
Date Posted: 27 November 2017
This document has been peer reviewed.