Externalities & the Schoolyard
Apply three Pigouvian-style policy tools — fee, tradable permits, command regulation — to a real schoolyard externality.
A four-round, intermediate behavioural-science and customer-transformation simulation set inside Brisbane Metro Utilities Ltd (BMU), a Queensland multi-utility serving 1.4 million water and energy customers on A$1.9 billion in annual revenue.
A four-round, intermediate behavioural-science and customer-transformation simulation set inside Brisbane Metro Utilities Ltd (BMU), a Queensland multi-utility serving 1.4 million water and energy customers on A$1.9 billion in annual revenue.
A heatwave water-restriction breach has gone viral — 4,200 automated fines, a pensioner wrongly fined, a hardship family disconnected in 39°C heat — and the state utilities regulator has opened a 'punitive and ineffective compliance' inquiry with up to A$5M in penalty exposure and a binding remedy.
Non-payment affects 11% of accounts (~154,000) and ties up A$47M in receivables; restriction non-compliance ran at 18% during the heatwave; enforcement costs A$6.8M a year while complaints rose 34% and Net Trust fell 12 points.
As the new Head of Customer Transformation you have one quarter (90 days) and a capped A$3M pilot budget to prove a behavioural approach beats enforcement before the regulator's interim report lands.
Working through Dootson's deviant-consumer-behaviour lens and COM-B, you must: Round 1 — diagnose WHY customers misbehave for each non-compliance type, separating 'can't comply' (hardship, friction, confusion) from 'won't comply' (deliberate, opportunistic defiance), and choose the target behaviour, because misdiagnosing the two is the costliest error.
Round 2 — design the intervention: pick a choice-architecture mechanism (social-norm messaging, opt-out default, friction reduction, salience/timing, commitment) and a human or digital channel matched to the audience's reachability, with an ethics check that avoids disguised coercion (the failure mode that caused the crisis).
Round 3 — set the rollout scope and test design within budget and 90 days, choosing between a controlled randomised pilot, a multi-arm human-vs-digital test, a single-suburb trial or a fast broad rollout, and deciding whether to run a control group as advocacy-group pressure mounts.
Round 4 — read heterogeneous pilot results (some nudges backfire on the won't-comply segment via the boomerang effect), then scale, redesign or stop each nudge and present a behaviourally grounded, ethical compliance strategy to the regulator.
The math rewards diagnosis-led design, channel-fit, experimental discipline with a counterfactual, and responsible scaling — and punishes the five classic errors: a one-size nudge, coercion in disguise, channel mismatch, no control group, and over-scaling a backfired nudge.
Final KPIs track projected compliance uplift (percentage points), the behaviour-change index, adoption rate, cost-per-conversion against the A$3M budget, and regulator and trust standing.
An intermediate simulation for participants who already know the core concepts of the subject, designed for master's and MBA programmes.
The decisions participants make during the simulation:
What participants follow on screen as the rounds go by:
Designed for courses in Microeconomics.
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