The Indian Government has lately asked manufacturers of air conditioner to set 24 Degrees Celsius as the default temperature for new ACs. As per the Power Ministry, every 1 Degree rise in AC temperature setting leads to saving 6% of electricity used. As fraction of a campaign to motivate greater competence in electricity usage for cooling, the AC makers will be asked to emphasize temperature setting in the range of 24 and 26 Degrees only.
The ACs will also have tags indicating the best temperature setting that is best suitable for health of consumers and savings in power bill. Obviously, you can set your device to a preferred temperature, which is less than the projected default of 24 Degrees. So, what is the reason of marketing a setting for default temperature at 24 Degrees in ACs? Or, what is the reason of providing a default setting when you can always change it as per requirement?
Last year, Richard Thaler (the American economist) was rewarded in Economic Sciences with the Sveriges Riksbank Prize in Memory of Alfred Nobel. He was awarded for answering the “power of default” via his mental accounting theory associated to restricted rationality in users.
Thaler had added psychologically realistic suppositions into study of economic decision-making. “By discovering the results of restricted social preferences, rationality, and shortage of self-control, he has displayed how these human behaviors systematically impact different moves as well as market results,” as per The Royal Swedish Academy of Sciences.
In other words, most users think they are competent of making rational moves. Thaler believed exactly the opposite. As per his theory, most users are lazy, but this inclination to do nothing can be employed to make their life more enhanced. How? By choosing to go for default settings, it will assist them to be lazy and users will have to do nothing and. Hence, with default settings this inclination to do nothing can be employed to get required consequences.