energy

Why Is Behavioral Economics So Popular?

Curated on October 7, 2018 by Stefaan Verhulst

David Gal at the New York Times: “Behavioral economics seems to have captured the popular imagination. Authors like Michael Lewis write about it in best sellers like “The Undoing Project,” while pioneers of the field like Daniel Kahneman popularize it in books like “Thinking, Fast and Slow.” Its lexicon of “nudging,” “framing bias” and “the endowment effect” has become part of the vernacular of business, finance and policymaking. Even “Crazy Rich Asians,” the summer’s blockbuster romantic comedy, features an explicit nod to “loss aversion,” a key concept in the field.

What is behavioral economics, and why has it become so popular? The field has been described by Richard Thaler, one of its founders, as “economics done with strong injections of good psychology.” Proponents view it as a way to make economics more accurate by incorporating more realistic assumptions about how humans behave.

In practice, much of behavioral economics consists in using psychological insights to influence behavior. These interventions tend to be small, often involving subtle changes in how choices are presented: for example, whether you have to “opt in” to a 401(k) savings plan versus having to “opt out.” In this respect, behavioral economics can be thought of as endorsing the outsize benefits of psychological “tricks,” rather than as calling for more fundamental behavioral or policy change.

The popularity of such low-cost psychological interventions, or “nudges,” under the label of behavioral economics is in part a triumph of marketing. It reflects the widespread perception that behavioral economics combines the cleverness and fun of pop psychology with the rigor and relevance of economics.

Yet this triumph has come at a cost. In order to appeal to other economists, behavioral economists are too often concerned with describing how human behavior deviates from the assumptions of standard economic models, rather than with understanding why people behave the way they do.

Consider loss aversion. This is the notion that losses have a bigger psychological impact than gains do — that losing $5, for example, feels worse than gaining $5 feels good. Behavioral economists point to loss aversion as a psychological glitch that explains a lot of puzzling human conduct. But in an article published this year, the psychologist Derek D. Rucker and I contend that the behaviors most commonly attributed to loss aversion are a result of other causes….

There is nothing wrong with achieving small victories with minor interventions. The worry, however, is that the perceived simplicity and efficacy of such tactics will distract decision makers from more substantive efforts — for example, reducing electricity consumption by taxing it more heavily or investing in renewable energy resources.

It is great that behavioral economics is receiving its due; the field has contributed significantly to our understanding of ourselves. But in all the excitement, it’s important to keep an eye on its limits….(More)”.

The Role of Urban Living Labs in Entrepreneurship, Energy, and Governance of Smart Cities

Curated on October 2, 2018December 11, 2018 by Stefaan Verhulst

Chapter by Ana Pego and Maria do Rosário Matos Bernardo in Handbook of Research on Entrepreneurship and Marketing for Global Reach in the Digital Economy: “Urban living labs (ULL) are a new concept which involves users in innovation and development and are regarded as a way of meeting the innovation challenges faced by information and communication technology (ICT) service providers.

The chapter focuses on the role of urban living labs in entrepreneurship, energy and governance of smart cities, where it is performed the relationship between innovations, governance, and renewable energy. The methodology proposed will focus on content analysis and on the exploration of some European examples of implemented ULL, namely Amsterdam, Helsinki, Stockholm and Copenhagen. The contributions of the present research should be the consolidation of knowledge about the impact of ULL on innovation and development of smart cities regarding the concepts of renewable energy, smart governance and entrepreneurship….(More)”

How Smart Should a City Be? Toronto Is Finding Out

Curated on September 9, 2018 by Stefaan Verhulst

Laura Bliss at CityLab: “A data-driven “neighborhood of the future” masterminded by a Google corporate sibling, the Quayside project could be a milestone in digital-age city-building. But after a year of scandal in Silicon Valley, questions about privacy and security remain…

Quayside was billed as “the world’s first neighborhood built from the internet up,” according to Sidewalk Labs’ vision plan, which won the RFP to develop this waterfront parcel. The startup’s pitch married “digital infrastructure” with an utopian promise: to make life easier, cheaper, and happier for Torontonians.

Everything from pedestrian traffic and energy use to the fill-height of a public trash bin and the occupancy of an apartment building could be counted, geo-tagged, and put to use by a wifi-connected “digital layer” undergirding the neighborhood’s physical elements. It would sense movement, gather data, and send information back to a centralized map of the neighborhood. “With heightened ability to measure the neighborhood comes better ways to manage it,” stated the winning document. “Sidewalk expects Quayside to become the most measurable community in the world.”

“Smart cities are largely an invention of the private sector—an effort to create a market within government,” Wylie wrote in Canada’s Globe and Mail newspaper in December 2017. “The business opportunities are clear. The risks inherent to residents, less so.” A month later, at a Toronto City Council meeting, Wylie gave a deputation asking officials to “ensure that the data and data infrastructure of this project are the property of the city of Toronto and its residents.”

In this case, the unwary Trojans would be Waterfront Toronto, the nonprofit corporation appointed by three levels of Canadian government to own, manage, and build on the Port Lands, 800 largely undeveloped acres between downtown and Lake Ontario. When Waterfront Toronto gave Sidewalk Labs a green light for Quayside in October, the startup committed $50 million to a one-year consultation, which was recently extended by several months. The plan is to submit a final “Master Innovation and Development Plan” by the end of this year.

Odd Numbers: Algorithms alone can’t meaningfully hold other algorithms accountable

Curated on August 18, 2018 by Stefaan Verhulst

Frank Pasquale at Real Life Magazine: “Algorithms increasingly govern our social world, transforming data into scores or rankings that decide who gets credit, jobs, dates, policing, and much more. The field of “algorithmic accountability” has arisen to highlight the problems with such methods of classifying people, and it has great promise: Cutting-edge work in critical algorithm studies applies social theory to current events; law and policy experts seem to publish new articles daily on how artificial intelligence shapes our lives, and a growing community of researchers has developed a field known as “Fairness, Accuracy, and Transparency in Machine Learning.”

The social scientists, attorneys, and computer scientists promoting algorithmic accountability aspire to advance knowledge and promote justice. But what should such “accountability” more specifically consist of? Who will define it? At a two-day, interdisciplinary roundtable on AI ethics I recently attended, such questions featured prominently, and humanists, policy experts, and lawyers engaged in a free-wheeling discussion about topics ranging from robot arms races to computationally planned economies. But at the end of the event, an emissary from a group funded by Elon Musk and Peter Thiel among others pronounced our work useless. “You have no common methodology,” he informed us (apparently unaware that that’s the point of an interdisciplinary meeting). “We have a great deal of money to fund real research on AI ethics and policy”— which he thought of as dry, economistic modeling of competition and cooperation via technology — “but this is not the right group.” He then gratuitously lashed out at academics in attendance as “rent seekers,” largely because we had the temerity to advance distinctive disciplinary perspectives rather than fall in line with his research agenda.

Most corporate contacts and philanthrocapitalists are more polite, but their sense of what is realistic and what is utopian, what is worth studying and what is mere ideology, is strongly shaping algorithmic accountability research in both social science and computer science. This influence in the realm of ideas has powerful effects beyond it. Energy that could be put into better public transit systems is instead diverted to perfect the coding of self-driving cars. Anti-surveillance activism transmogrifies into proposals to improve facial recognition systems to better recognize all faces. To help payday-loan seekers, developers might design data-segmentation protocols to show them what personal information they should reveal to get a lower interest rate. But the idea that such self-monitoring and data curation can be a trap, disciplining the user in ever finer-grained ways, remains less explored. Trying to make these games fairer, the research elides the possibility of rejecting them altogether….(More)”.

Countries Can Learn from France’s Plan for Public Interest Data and AI

Curated on August 15, 2018 by Stefaan Verhulst

Nick Wallace at the Center for Data Innovation: “French President Emmanuel Macron recently endorsed a national AI strategy that includes plans for the French state to make public and private sector datasets available for reuse by others in applications of artificial intelligence (AI) that serve the public interest, such as for healthcare or environmental protection. Although this strategy fails to set out how the French government should promote widespread use of AI throughout the economy, it will nevertheless give a boost to AI in some areas, particularly public services. Furthermore, the plan for promoting the wider reuse of datasets, particularly in areas where the government already calls most of the shots, is a practical idea that other countries should consider as they develop their own comprehensive AI strategies.

The French strategy, drafted by mathematician and Member of Parliament Cédric Villani, calls for legislation to mandate repurposing both public and private sector data, including personal data, to enable public-interest uses of AI by government or others, depending on the sensitivity of the data. For example, public health services could use data generated by Internet of Things (IoT) devices to help doctors better treat and diagnose patients. Researchers could use data captured by motorway CCTV to train driverless cars. Energy distributors could manage peaks and troughs in demand using data from smart meters.

Repurposed data held by private companies could be made publicly available, shared with other companies, or processed securely by the public sector, depending on the extent to which sharing the data presents privacy risks or undermines competition. The report suggests that the government would not require companies to share data publicly when doing so would impact legitimate business interests, nor would it require that any personal data be made public. Instead, Dr. Villani argues that, if wider data sharing would do unreasonable damage to a company’s commercial interests, it may be appropriate to only give public authorities access to the data. But where the stakes are lower, companies could be required to share the data more widely, to maximize reuse. Villani rightly argues that it is virtually impossible to come up with generalizable rules for how data should be shared that would work across all sectors. Instead, he argues for a sector-specific approach to determining how and when data should be shared.

After making the case for state-mandated repurposing of data, the report goes on to highlight four key sectors as priorities: health, transport, the environment, and defense. Since these all have clear implications for the public interest, France can create national laws authorizing extensive repurposing of personal data without violating the General Data Protection Regulation (GDPR) which allows national laws that permit the repurposing of personal data where it serves the public interest. The French strategy is the first clear effort by an EU member state to proactively use this clause in aid of national efforts to bolster AI….(More)”.

The Magic of “Multisolving”

Curated on July 24, 2018 by Stefaan Verhulst

Elizabeth Sawin at Stanford Social Innovation Review: “In Japan, manufacturing facilities use “green curtains”—living panels of climbing plants—to clean the air, provide vegetables for company cafeterias, and reduce energy use for cooling. A walk-to-school program in the United Kingdom fights a decline in childhood physical activity while reducing traffic congestion and greenhouse gas emissions from transportation. A food-gleaning program staffed by young volunteers and families facing food insecurity in Spain addresses food waste, hunger, and a desire for sustainability.

Each of these is a real-life example of what I call “multisolving”—where people pool expertise, funding, and political will to solve multiple problems with a single investment of time and money. It’s an approach with great relevance in this era of complex, interlinked, social and environmental challenges. But what’s the best formula for implementing projects that tackle many problems at once?

Climate Interactive, which uses systems analysis to help people address climate change, recently completed a year-long study of multisolving for climate and health. We learned there is no one-size-fits-all recipe, but we did identify three operating principles and three practices that showed up again and again in the projects we studied. What’s more, anyone wanting to access the power of cross-sectoral partnership can adopt them….(More)”.

Prizes are a powerful spur to innovation and breakthroughs

Curated on July 10, 2018August 3, 2018 by Stefaan Verhulst

John Thornhill in the Financial Times: “…All too often today we leave research and innovation in the hands of the so-called professionals, often with disappointing results. Winning a prize often matters less than the stimulus it provides for innovators in neighbouring fields In recent years, there has been an explosion in the number of professional scientists. Unesco estimates that there were 7.8m full-time researchers in 2013.

The number of scientific journals has also increased, making it difficult even for specialists to remain on top of all the latest advances in their field. In spite of this explosion of knowledge and research spending, there has been a striking lack of breakthrough innovations, as economists such as Robert Gordon and Tyler Cowen have noted.

Maybe this is because all the low-hanging technological fruit has been eaten. Or perhaps it is because our research and development methodology has gone awry.

Geoff Mulgan, chief executive of Nesta, is one of those who is trying to revive the concept of prizes as a means of encouraging innovation. His public foundation runs the Challenge Prize Centre, offering awards of up to £10m for innovation in the fields of energy and the environment, healthcare, and community wellbeing. “Setting a specific target, opening up to anyone to meet it, and providing a financial reward if they succeed is the opposite of how most R&D is done,” Mr Mulgan says. “We should all focus more on outcomes than inputs.”…
But these prizes are far from being a panacea. Indeed, they can sometimes lead to perverse results, encouraging innovators to fixate on just one, original goal while ignoring serendipitous surprises along the way. Many innovations are the happy byproduct of research rather than its primary outcome. An academic paper on the effectiveness of innovation prizes concluded that they could be a useful addition to the armoury but were no substitute for other proven forms of research and development. The authors also warned that if prizes were poorly designed, managed, and awarded they could prove “ineffective or even harmful”.

That makes it essential to design competitions in careful and precise detail. It also helps if there are periodic payouts along the way to encourage the most promising ideas. Many companies have embraced the concept of open innovation and increasingly look to collaborate with outside partners to develop fresh ideas, sometimes by means of corporate prizes….(More)”.

Meet the Numtots: the millennials who find fixing public transport sexy

Curated on July 6, 2018August 3, 2018 by Stefaan Verhulst

Elle Hunt in The Guardian: “Who makes a Facebook meme group about trains? The Numtots, that’s who: a global network of millennials who want to make cities better

A metro-map style logo for the New Urbanist Memes for Transit-Oriented Teens Facebook group. Illustration: Mitchell Sheldrick/New Urbanist Memes for Transit-Oriented Teens.

The year is 2025. There are no cars, only public transport and bicycles. Four-lane highways have been replaced by bike paths. Pedestrians share the pavements with cyclists. The air is clean (because the buses are electric), and the living is easy.

This is the future the Numtots want.

Predominantly millennials with a passion for public transport, urban planning and internet humour, Numtots’ interests intersect in New Urbanist Memes for Transit-Oriented Teens, the Facebook group from which they derive their nickname. There, nearly 100,000 of them discuss and debate their perfect city, or transit lines in their area, or perpendicular traffic flow and improvisational vehicle pathing….Numtots – or just ’tots – are the sorts of older teens through to thirtysomethings who identify as being “irrationally excited” for the forthcoming Maryland purple line; who claim their first word as a child was “bus” (“I think I was destined to become a Numtot …”); who stridently propose ideas for “what the Amtrak system should look like” (“Fight me if you don’t like it”); and who mercilessly make fun of Richard Florida’s leather jacket….

Numtots’ guiding principles are broadly summed up by the page’s URL: “What would Jane Jacobs do?”…The enthusiastic response to the group – and the Generation Y-led “yimby” movement for high-density housing it dovetails with – suggests there may be something fundamentally millennial about urbanism. “I think at first people were really excited that they had a place to talk about living in cities,” says Orenstein, also 21. “But as the group has picked up steam, more people are joining that weren’t interested in the issues but are finding that maybe, actually, they are.” It makes sense: improving public transport, transitioning to renewable energy and investing in future-focused infrastructure are not often vote winners, being costly and slow to enact – but young people have more of a stake in seeing them put into action….(More)”.

Blockchain in Cities

Curated on June 14, 2018August 3, 2018 by Stefaan Verhulst

Report by Brooks Rainwater at the National League of Cities: “Public trust in American lawmakers (particularly at the national level), elections and democratic institutions has plummeted in recent years. While there are many contributing factors, the explosion of digital information, digital misinformation and outright abuse has played a major role in this downward trend.

To restore confidence in the core tenets of our society, leaders need solutions tailored to an increasingly digital world. Additionally, blockchain presents direct opportunities for cities — voting, real estate, transportation, energy, water management and more. The potential exists for local governments to utilize blockchain to lower costs, improve efficiency and create a framework to accelerate innovation, access and accountability in public management.

Blockchain is a shared database or distributed ledger, located permanently online for anything represented digitally, such as rights, goods and property. At its core, it is a secure, inalterable electronic register. Through enhanced trust, consensus and autonomy, blockchain brings widespread decentralization. This is a departure from the traditional role that centralized intermediaries or entities — such as banks — played to manage our valuable transfers. Its inherent transparency promotes relationships and builds confidence.

In the early days of the internet, few people could have predicted the magnitude of the disruption it would cause and the pivotal role it would play in globalization. Some experts say blockchain will potentially change the nature and security of all interactions of value. Because blockchain has large implications for individuals, it will have even larger ramifications for cities.

Here are seven key ways that cities can explore blockchain now:

Use blockchain to expand digital inclusion initiatives and help support the un- and under-banked.
Explore options for using blockchain in governance, procurement processes and business licensing.
Consider blockchain to increase civic engagement and offer additional pathways for voting.
Investigate how blockchain can help strengthen local alternative energy initiatives.
Prepare for the utilization of blockchain for digital transportation infrastructure needs as autonomous vehicles are more broadly deployed in cities.
While the benefits could be manifold, be cognizant of the potential for negative externalities that will need to be addressed and make sure that cities give themselves time to absorb each impact of introducing this technology.
Pay attention to what other cities have experienced and learned when it comes to blockchain. And above all, keep an open mind and be open to change. This new technology might just bring some unexpected yet very welcome benefits to your city and its residents….(More)”.