One of the best books on behavioral economics is Nudge. I’m not just saying that because their blog (which needs to get started again) lists me in their blogroll. I was a fan of the book long before that. Nudge makes the argument that people should be free to make their own choices, but they can be encouraged to make the right decisions. One of the best examples is automatically enrolling employees in 401k plans and giving them the choice to opt out. This has proved to dramatically increase retirement savings rates as many people would normally choose not to enroll.
A car blog I regularly read called Inside Line Road Tests tests new vehicles over a period of 20,000 miles and the authors write about what they learn from the car over the extended period. One driver noticed the tachometer on their Jeep Wrangler has a green line in the lower rev range much like all cars have a red on at the high end. The green is there to encourage more responsible driving. By keeping the car’s engine at a lower speed it burns less fuel, leading to better fuel economy. Most of us know this intuitively, but may not acknowledge it in our day to day driving patterns. The blogger noted that the green line seems useless and asked “do we really need a green zone to tell us that we’ll get better mileage by running the engine at just over idle? I would hope not.”
But that’s precisely what we need. It’s likely that most people don’t think about their driving habits affecting the mileage of their cars. And even those that do probably don’t think about it every time they get in the car.
Jeep has done a very basic thing here that is very low cost and likely does result in an increase in the fuel efficiency of the Wrangler, which isn’t exactly frugal. If customers perceive better fuel economy than they thought, it’s likely to increase delight with the vehicle. Jeep has gone with the most subtle of nudges to get people driving a little bit smarter, but they are hardly innovators in the space.
Ford takes the nudge one step further. As you drive the Fusion Hybrid efficiently, green leaves start growing on a screen in the dashboard. If you accelerate quickly or otherwise use too much fuel the leaves go away. This takes a simple nudge to drive more intelligently and turns it into a game.
Government regulation is requiring more fuel efficiency out of vehicles these days. Manufacturers are coming out with all kinds of new technologies to meet the regulations. These are designed to make the car itself more fuel efficient. And that is all the government regulates. They do not regulate making the driver more efficient. Consider it a good move that companies are doing what they can to make the driver use less gas. It’s not very costly and everyone benefits. Like most nudges.
 By The Weakonomist |
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