In order to try to cut waste Winchester University campus offered a 25 p discount on coffee if people brought their own reusable beakers rather than serving it in the plastic, single-use ones. Very few people took up the offer. They then changed the system reducing the cost of the coffee by 25 p but charging an extra 25 p for a plastic, single-use beaker. The outcome is the same for the customer but under the new system 34,000 fewer single use beakers were used in a year.
For me their are two messages:
- Firstly if you want to influence people's behaviour, for example with regard to recycling, you have to be very careful how you offer incentives.
Secondly it is another example that debunks the concept of Homo Economicus that is fundamental to Neo Classical economic theory. While the theory accepts that everybody has their own motivations and so will react differently to different situations it stipulates that we all behave rationally when making our decisions. In this case the outcome in terms of the cost of a beaker of coffee is the same in both situations but the behaviour changed radically simply because of how it was presented. That is not rational in economic terms and so shouldn't happen. Yet another example of, "That's all very well in practise but does it work in theory?"