Fabio Giglioni, Genny Lucidi, Cognitive-based Regulation in Energy Markets: Prompting Energy Efficiency through Nudging and Empowerment


1. Preliminary remarks. 

2. Why energy field is a fruitful experiment. 

3. Default rules: a nudging strategy in energy market. 

3.1. A general overview.

3.2. Applying default rules for energy efficiency.

3.2.1. Changing the default thermostat setting for energy saving.

3.2.2. Default rule for smart grid and smart meters roll-out. 

4. Social norms: a second nudging strategy to promote energy efficiency. 

5. Behavioural insights into information-based regulation. 

5.1. Cognitive empowerment through Semplification.

5.1.1. From «product-attribute» information to «product-use» disclosure. 

5.1.2. American RECAP-model versus Italian “Trova Offerte” solution. 

5.2. “Framing” and “salience” of information: the midway between cognitive empowerment and nudging. 

5.2.1. Energy labeling scheme: an example of salience and framing effect. 

6. Conclusions


 Legal studies have increasingly stressed the importance of assuming the centrality of the regulatees to pursue more effective regulatory results and achieve a
broader satisfaction of general interests. Conceiving the regulated subject as an active part of the system also means knowing and studying his behavioural responses.
The study of human behaviour belongs to the specific field of behavioural sciences
analysis, whereas the most recent paradigm of Behavioural Law and Economics is
dealing with a possible integration of such behavioural insights into regulation and
legal framework.
This paper fits in this scenario and reports the argumentation into the specific
sector of energy regulation. Starting from the assumption about the centrality of the
consumer for the achievement of energy efficiency and environmental protection goals, the present study analyzes new possible regulatory instruments designed according to the evidence of behavioural sciences. In particular, the issue proposes an investigation of these techniques, distinguishing them in two main categories. On the one hand, the analysis will focus on default rules and social norms, which are the most classic examples of “pure nudging”. At the other side, other instruments belonging to the information-based regulation paradigm will be discussed and they will therefore be considered as “cognitive empowerment instruments”. Said that, by exemplifying nudging and cognitive empowerment techniques through case studies and experiments coming from the international, European and national scope, the argument offers a pratical framework for a cognitive-based regulation in energy market and illustrates the way in which it sometimes can help prompt sensitive regulatory interests (such as energy efficiency), while leading consumers to choosing the best choice for themselves.