Activity-Based Micro-pricing: Realizing Sustainable Behavior Changes through Economic Incentives

In this paper, we further develop the idea of combining pervasive computing techniques with electronic payment systems to create activity-based micro-incentives. Economic incentives are an effective way to influence consumer behavior, and are used in e.g. marketing and resource coordination. Our approach allows marketers and regulators to induce consumers to perform particular actions in new application domains by attaching micro-prices to a wider range of behaviors. A key challenge is designing incentive mechanisms that result in desired behavior changes. We examine two basic incentive models. Based on the results of preliminary experiments, we discuss how economic incentives can affect consumer attitudes and lead to sustainable behavior changes.