Applying Pervasive Technologies to Create Economic Incentives that Alter Consumer Behavior

Economic incentives are a powerful way of shaping consumerbehavior towards more commercially efficient and environmentallysustainable patterns. In this paper, we explorethe idea of combining pervasive computing techniques withelectronic payment systems to create activity-based microincentives.Users who consume additional resources by e.g.,occupying an air-conditioned space instead of a normal spaceare levied additional micro-payments. In an alternative approach,consumers who choose to save resources are rewardedwith micro-rebates off the price of a service. As a result,the cost of using a service corresponds more closely withthe resources used, leading market mechanisms to allocateresources efficiently. A key challenge is designing incentivemechanisms that alter consumer behavior in the desiredfashion. We introduce four incentive models, and presentevaluation results suggesting that consumers make differentdecisions depending on which model is used