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The Behavioral Economics of Mobility

What:
A two-day seminar for advanced students with economics and/or urban planning and transport research background. 6 credit points with full seminar paper and presentation. Limited to 8 participants. Send a short motivation (one paragraph) in by April 3, 2012, to . Preparation meeting is on April 18, 3pm in Room 238 (Erweiterungsbau).

When:
26.-27.7.2012.

Where:
The seminar will be at a farm in Brandenburg and take two days.

Who:

Dr. Felix Creutzig and Linus Mattauch

Costs:
ca. 30-40 EUR.

Format:
Presentations by participants and teachers. Frequent discussions in break-out groups.

Abstract:
Standard transport economics explains behavior through the method of revealed preferences: agents make utility-maximizing mode choices by focusing solely on travel time and travel cost (Small and Verhoef 2007). Behavioral Economics questions the validity of this approach to consumer decisions, highlighting how emotional, informational and social factors crucially influence economic choices (Ariely 2008, Kahneman 2011, Tversky and Kahneman 1981). In addition, the spatial environment shapes our behavior. The relative location of residence, job, shopping opportunities, and leisure activities predetermine the set of reasonable transport choices we can make (Handy, 2005).

In this seminar, we discuss how insights from behavioral economics about transport choices are relevant for the decarbonization challenge, which is particularly acute for this sector. We want to understand biases and common heuristics governing transport decisions (Gaker and Walker 2011, Greene et al. 2009) as well as the  influence of providing adequate and salient information (Gaker et al. 2010) and discuss the influence of social norms (Johansson-Stenman and Martinsson 2006). We discuss recent attempts to formalize “bounded-rational” behavior in economic models, putting a positive value on travel time (Hess et al., 2004).
Our seminar culminates in a critical, but hopeful appraisal of “libertarian paternalism” policies (Sunstein and Thaler 2003, 2008) for urban transportation, influencing behavioral choice, and a discussion of how they constitute a useful complement of conventional approach of economic policy to tax externalities.

References:
Ariely, Dan (2010). Predictably irrational: The hidden forces that shape our decisions. Revised and updated Edition. New York: HarperCollins.

Gaker, David and Joan Walker (2011). Insights on Car-Use Behaviors from Behavioral Economics. In: K. Lucas, E. Blumentberg and R. Weinberger (eds.): AutoMotives. Understanding Car Use Behaviors. Bingley: Emerald (2011).

Gaker, David, Zheng, Y. And Joan Walker (2010). Experimental economics in transportation:  A focus on social influences and the provision of information. Transportation Research Record, 2156: 47-55.

Greene, David, John German and Mark Delucchi (2009). Fuel Economy: The Case for Market Failure. In: D. Sperling, J.S. Cannon (eds.), Reducing Climate Impacts in the Transportation Sector. New York: Springer.

Handy, S. (2005) Does the built environment influence physical activity? Examing the evidence. Critical Assessment of the Literature on the Relationships Among Transportation, Land Use, and Physical Activity, TRB Special Report 282

Hess, S., Bierlaire, M. & Polak, J.W. (2005), Estimation of value of travel-time savings using Mixed Logit models, Transportation Research Part A, 39(2-3), pp. 221-236.

Johansson-Stenman, Olof and Peter Martinsson (2006). Honestly, why are you driving a BMW? Journal of Economic Behaviour & Organization 60 (2): 129-146.

Kahneman, Daniel (2011). Thinking, Fast and Slow. New York: Macmillan 2011

Small, Kenneth and  Erik Verhoef (2007). The Economics of Urban Transportation. Abindgon: Routledge.

Sunstein, Cass and Richard Thaler (2003). Libertarian Paternalism. American Economic Review 93(2): 175-179.

Sunstein, Cass and Richard Thaler (2008). Nudge: Improving decisions about health, wealth and happiness. Yale: Yale University Press.

Tversky, Amos and Daniel Kahneman (1981). The framing of decisions and the psychology of choice. Science 211 (4481): 453-458.

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