Biases and nudges in the circular economy: A review

Abstract

The circular economy transition requires consumers to make efforts in their waste disposal behaviors by increasing waste sorting, repairing and reusing products, and reducing the amount of waste produced. The literature has identified several barriers to consumers’ adoption of these practices. In this article, we posit that such barriers can be ultimately linked to well-known decisional biases and proceed to offer a review. In doing so, we categorize biases into “cognitive”, referring to deviations from judgment and behavior that would be “correct” according to the rules of logic and mathematics, and “motivational”, encompassing judgment and behavior driven by desirability concerns. We also survey the existing behavioral policies addressing the identified biases, focusing on “nudges”, that is, interventions leveraging biases to improve welfare. In our review, we call attention to the importance of recognizing the relevant bias behind specific behaviors to identify the best interventions to implement. By offering a conceptual link between biases and circular economy practices, we also lay the groundwork for future experimental investigation.