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…
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Barriers to Behavior Change
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Information Deficits
Attention Deficits
Motivation Deficits
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Information Deficits
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Metrics matter
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“Carbon footprint” metric has created new
goals
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Information Deficits
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Metrics needed
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“Carbon footprint” metric created new goals
Timely feedback crucial for learning
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Desire to improve a powerful goal
Real-time feedback one of the addictive
properties of video games
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Attention Deficits
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Finite attention requires selectivity
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Selectivity makes us myopic
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Focus on status quo
Framing outcomes as gains or losses
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Present bias for intertemporal decisions
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Relative comparisons
Loss aversion
Outcomes (cost savings) in the future are disproportionately
discounted
(Smart meter) info & feedback displays
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Provide understandable “units”
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kWs vs. # of 100W incandescent lightbulbs
Facilitate relative comparisons
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Improvements relative to last month, last year, best neighbor,6
etc.
Motivation Deficits
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Status-quo bias
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Inertia, risk aversion, loss aversion
Biased argument recruitment (Query Theory)
Insufficient trust
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In companies/utilities, government agencies
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Multiple Ways of Making Decisions
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Decisions get made in qualitatively different
ways (Weber & Lindemann, 2007)
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“by the head”  calculation-based decisions
“by the heart”  emotion-based decisions
“by the book”  rule-based decisions
Behavior change with calculation-based decisions
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Uphill battle
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many decision biases will work against you
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Discounting, loss aversion, status-quo biases
Make environmentally-responsible and sociallydesirable options the default (Johnson & Goldstein,
2003; Thaler & Sunstein, 2008)
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E.g., in building codes, energy choices
Prime social goals
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Apollo-8 image of planet earth
Use of group settings to communicate information
Behavior change with emotion-based decisions
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Tempting to scare people into “right”
behavior
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Problematic for at least two reasons
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Finite pool of worry
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Increase in worry about one hazard decreases worry about
other hazards (Weber, 1997)
Single action bias
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Tendency to engage in single corrective action (Weber,
2006)
Yet, most environmental problems require multiple and
sustained responses
Behavior change with rule-based decisions
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Much behavior driven by habits
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based on past calculations or internalized rules
Create new habits, by following new rules
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Respected authority to issue new rule
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Behavior prescriptions need to be concrete
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“What would Jesus do?”
“What would Jesus drive?”
Capitalize on social observation and imitation
by having celebrities model desired behaviors
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“What does Angelina drive?”
Conclusions
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Human cognitive and emotional limitations
present challenges, but also opportunities
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Preferences are malleable, for better or
worse
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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
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Introduce new mental accounts and metrics
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Provide information about energy use in
experiential ways
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to focus attention on environmental goals and to measure
progress
direct or in form of simulations
Shape decision environment
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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
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
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Johnson EJ, Goldstein D. 2003. Do defaults save lives? Science 302:1338-9
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Thaler RH, Sunstein CR. 2008. Nudge : improving decisions about health,
wealth, and happiness. New Haven: Yale University Press.
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Weber, E. U. & Johnson, E. J. (2009). Mindful judgment and decision making.
Annual Review of Psychology, 60, 53-86.
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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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