In the next example, two alternative frames evoke different mathematical intuitions, and one is much superior to the other. In an article titled “The MPG Illusion,” which appeared in Science magazine in 2008, the psychologists Richard Larrick and Jack Soll identified a case in which passive acceptance of a misleading frame has substantial costs and serious policy consequences. Most car buyers list gas mileage as one of the factors that determine their choice; they know that high-mileage cars have lower operating costs. But the frame that has traditionally been used in the United States—miles per gallon—provides very poor guidance to the decisions of both individuals and policy makers. Consider two car owners who seek to reduce their costs:
Adam switches from a gas-guzzler of 12 mpg to a slightly less voracious guzzler that runs at 14 mpg. The environmentally virtuous Beth switches from a 30 mpg car to one that runs at 40 mpg. Suppose both drivers travel equal distances over a year. Who will save more gas by switching?
You almost certainly share the widespread intuition that Beth’s action is more significant than Adam’s: she increased mpg by 10 miles rather than 2, and by a third (from 30 to 40) rather than a sixth (from 12 to 14). Now engage your System 2 and work it out. If the two car owners both drive 10,000 miles, Adam will reduce his consumption from a scandalous 833 gallons to a still shocking 714 gallons, for a saving of 119 gallons. Beth’s use of fuel will drop from 333 gallons to 250, saving only 83 gallons. The mpg frame is wrong, and it should be replaced by the gallons-per-mile frame (or liters-per–100 kilometers, which is used in most other countries). As Larrick and Soll point out, the misleading intuitions fostered by the mpg frame are likely to mislead policy makers as well as car buyers.
Under President Obama, Cass Sunstein served as administrator of the Office of Information and Regulatory Affairs. With Richard Thaler, Sunstein coauthored Nudge, which is the basic manual for applying behavioral economics to policy. It was no accident that the “fuel economy and environment” sticker that will be displayed on every new car starting in 2013 will for the first time in the United States include the gallons-per-mile information. Unfortunately, the correct formulation will be in small print, along with the more familiar mpg information in large print, but the move is in the right direction. The five-year interval between the publication of “The MPG Illusion” and the implementation of a partial correction is probably a speed record for a significant application of psychological science to public policy.
Running Down Vimy 