Elke U. Weber
Center for Research on Environmental Decisions
Uris Hall 716, 3022 Broadway
New York, NY 10027-6902
NBER Working Papers and Publications
|January 2014||Aiding Decision-Making to Reduce the Impacts of Climate Change|
with Howard Kunreuther: w19776
Utilizing theory and empirical insights from psychology and behavioral 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 behavioral biases related to this asymmetry. The use of choice archit...