Nudging truckers

Marc Gunther at the Energy Collective reports on two interesting case studies of greening company truck fleets. The first strategy was to spark friendly competition

When Chris McKenna, who manages a fleet of trucks for Poland Spring, learned that the company’s drivers were racking up as much as 1,400 hours a month of idle time, he saw an opportunity to make a difference. Running truck engines in winter kept the cabs warm — the company is based in Maine — but it cost Poland Spring money and polluted the air.

To see which of the company’s 65 drivers were racking up the most idle time, McKenna ranked them, based on data from onboard computers. “All we did was talk to them about it, and put a list up in the break room,” he told me. “Human nature, no one wants to be at the bottom of the list.” To sweeten the deal, the 10 drivers with the lowest idling time got a gift card for fuel they could use for their own cars.

The results were dramatic. Idle time dropped from 1,400 hours in February 2007 to 1000 hours in February 2008 to just 380 hours in February 2009. Depending on fuel costs, cutting idle time has saved the company thousands of dollars a year—roughly $20,000 during 2008, for example.

The second strategy was to change the default rule.

I also spoke with fleet managers at Carrier, the global manufacturing firm that’s part of United Technologies, and at health-care firm Novo Nordisk. At all three companies, dedicated fleet managers came up with simple, win-win strategies that saved their companies money and reduced GHG emissions. Carrier took unnecessary parts and tools out of its repair vans, reducing weight. At Novo Nordisk, Donna Bibbo, manager of fleet and travel, made small changes to the list of company cars made available to sales people; those who wanted an SUV or minivan could still get one, but they needed approval from a supervisor. “For the whole year, I don’t think I ordered 25 minivans,” Bibbo says. In past years, she would order 300 to 350.

Homeowners are thinking about walking away from their mortgages. Banks are thinking about which homeowners are most likely to walk away.

Richard Thaler recently asked why so few people have walked away from their mortgage. Today, the New York Times reported that more homeowners are thinking about it. They aren’t the only ones thinking about it. Banks are trying to figure out who is strategically defaulting.

Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.

“Banks are pulling credit reports to see if it’s a strategic default,” he said. “If you’re behind on all your other payments, you’re okay. But if you’re not, they’ll come after you.”

The paradox of choice…now in 2D

As Nudge blog readers know well, the paradox of choice is the paralysis that accompanies decision making as the number of available options increases. It’s harder to pick a prescription drug plan when there are 60 plans than when there are four.

Three marketing researchers think there’s more to the paradox of choice than, well, choice. In the paper “Variety, Vice and Virtue: How Assortment Size Influences Option Choice,” they argue that the object consumers are making a decision about matters too. Through five experiments that explore choices involving ice cream and fruit, and MP3 players and printers, they find that increasing the number of available options leads people to choose the more sensible goods–the fruit instead of the ice cream, the printer instead of the MP3 player–because they are easier to justify.

Continue reading the post here.

Sendhil Mullainathan on behavioral economics and the hardest social problems

MacArthur winner and Harvard behavioral economist Sendhil Mullainathan talks about a tricky set of social problems — those we know how to solve, but don’t. We know how to reduce child deaths due to diarrhea, how to prevent diabetes-related blindness and how to implement solar-cell technology … yet somehow, we don’t or can’t. Why?

Assorted links

1) Richard Thaler and George Osborne in the Guardian. U.K. pilot recycling programs to replace fines with rewards are showing results.

2) A new study finds calorie labeling for a hypothetical McDonald’s meal reduces calorie consumption. One key difference from past studies: People aren’t ordering meals for themselves. Parents are ordering meals for their children. Hat tip: Patti Hunter.

3) Crayola’s law says that the number of Crayola colors doubles every 28 years. How much faster do children who color with the original box of crayons finish compared to those with the mega 120-color box? Hat tip: Christopher Daggett.

4) A web-based version of Dustin Hoffman’s mason jars. Hat tip: Elliot Crosby-McCullough.