I wonder how to apply this concept to water management, i.e., the idea that people "really do" want to save water but are too lazy to take the steps required. Here are a couple of ways to facilitate "paternalistic" water conservation:
- Use low-flow shower heads, faucets and toilets -- if people want to use a lot of water, they need to put in effort. (Not very soft, I admit.)
- Start a "water consultant" business where the consultant implements all the water conservation steps (many fixed costs) for you. You want to do it but lack willpower and/or time.
- Create water markets and require that "sellers" put all of their rights into the market. If they want to buy back their rights, they have to pay a market price. This method breaks the "it's my water and I pay nothing, so it's free" mentality that underpins endowment effects. (It also makes the cost of risk-aversion explicit. Sellers who are afraid of paying market prices for water will know exactly how much they will have to pay.)
Please comment and/or add your own ideas of policies that encourage our "better self."