Behavioural economics in infrastructure design

While behavioural economics theory has been in existence for decades, it rose to prominence after the publication of Nudge: Improving Decisions About Health, Wealth, and Happiness in 2008. The book proved influential amongst politicians, public health practitioners and private sector leaders.

In nutshell, behavioural economics models explain human behaviour and decision-making from a methodological standpoint. Using these models can identify how a variety of business-relevant outcomes can be improved through simple interventions. This sounds appealing in theory, but our client, a multinational company involved in major infrastructure projects, wanted to know how it would work in practice.

The client, which operates in the design, construction, and operation of infrastructure projects wanted to learn how insights from behavioural economics could support their four diverse business units. Infrastructure companies can use these insights to address challenges concerning safety and efficiency of construction work. They can even increase revenue at airports and on toll highways. Our client sought to understand the challenges these insights could help solve, along with the benefits and advantages of each application.

Assessing 12 behavioural models

Working with the client, we confirmed the goals for each business unit and the 12 behavioural economics models to investigate. Our team of experts identified any interventions based on models that could improve aspects of their operation. As part of the engagement, we also had to identify any practical requirements and potential barriers to the implementation of specific models, including enabling technologies and relevant legal constraints.

Our expert team drew on their experience of identifying practical applications from behavioural economics. The team also had experience in a specific sub-industry relevant to one of our client’s business units.

CamIn’s team analysed common business models in the associated sub-industry and forecast how these models would change over time. This work helped us identify the most significant applications for behavioural economics-based interventions, as well as the impacts of “market pull” and “technology push” factors over the next decade.

We then shortlisted 10 use cases that unlocked lucrative business opportunities over the next three years. For each business unit, CamIn also suggested which emerging technologies would allow the client to capture the benefits from each shortlisted use case. This provided them with an overview of the next phase of our project, which was to develop product development strategies for each selected use cases. In addition, our team also demonstrated how they could improve customer experience through emerging technologies within the next three years.

We identified four use cases from the shortlisted 10. Within three months of the project completion, our client confirmed budgets for exploring these emerging technology solutions and began developing proof-of-concept solutions.