Loss aversion on the road

Erel Avineri of the Centre for Transport & Society looks at traffic from the perspective of a Human, not an Econ. Standard economic models of people seem to do a poor job anticipating what people do on the road. Using models from behavioral economics and psychology, Avineri is interested what influences our boundedly rational travel behavior. What kind of feedback might change it? What effect do our interactions with others on the road have? According to his web site, he is “exploring how to change travellers’ behaviour in a way that does not limit their freedom of choice (for example by ‘nudging’).” In some interesting research, he applied the lessons of loss aversion to everyday decision making by travelers. We asked Avineri to share his insights with Nudge blog readers.

Continue reading the post here.

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One Response to “Loss aversion on the road”

  1. Ape Man Says:

    Had a funny, vaguely related experience on the road driving up the east coast yesterday.

    Every time road conditions would worsen, as they did several times throughout the day, some number of drivers on the road would slow their speed by 10 mph or so, but the majority of traffic would continue as before.

    Then 10 minutes later we would all drive by a nasty wreck, and everyone would slow down to the speed being maintained by the slower drivers.

    This happened three or four times, raising the question – are there people who actually need to SEE a cracked-up car in order to realize that yes, if you drive too fast in the ice and snow, you can crack up your car?

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