Behavioral economics

New York City is poised to launch the first congestion pricing plan to reduce traffic in a major U.S. metropolitan area. Like many journeys in the Big Apple, this one has been punctuated by delays. Once the system starts up, however, it’s expected to significantly reduce gridlock in Manhattan and generate billions of dollars to improve public transit citywide. The basic idea is simple. To enter the Congestion Relief Zone, which covers Manhattan south of 60th Street, large trucks will pay $36, small trucks $24, passenger vehicles $15 and motorcycles $7.50. Ride-share vehicles and taxis will pay $2.50 and $1.25, respectively. Peak hours run from 5 a.m. to 9 p.m. on weekdays and 9 a.m. to 9 p.m. on weekends; overnight tolls are discounted by 75%. Evidence from cities around the world shows that charging motorists fees for driving into city centers during busy periods is a rarity in urban public policy: a measure that works and is cost-effective. Congestion pricing has succeed...

Back-to-school sales are underway, and people across the country will be shopping online to fill up backpacks, lockers and closets – and they’ll be taking advantage of free returns. Making it easy for customers to return items at no cost started as a retail strategy to entice more people to shop online. But it’s getting expensive, for both retailers and the planet. In 2022, retail returns added up to more than US$800 billion in lost sales. The transportation, labor, and logistics involved raised retailers’ costs even higher. Product returns also increase pollution, greenhouse gas emissions and waste in landfills, where many returned products now end up. So how can retailers fix this problem and still provide quality customer service? We conduct research in reverse logistics, focusing primarily on the intersection of retail returns and customer behavior. Here are some insights that can help reduce the abuse of free returns and lower costs without losing...