In 2010, the Commission also ran the first large behavioural study to find out how consumers search for information, and choose between retail investment products. The financial environment has evolved so much that consumers are often ill-prepared to make sound decisions about increasingly complex investment products. Via a series of online and face-to-face experiments, we found that people struggle to make good investment choices even in simplified tasks. Only 2% of the subjects made all five investment choices optimally. The study led to clear policy recommendations. It suggested that standardisation and simpler product information is needed. The Commission used the results of the study in the review of the legislation on packaged retail investment products. I can only agree and am convinced that behavioural insights are highly relevant to any policy intervention where the way in which people respond helps to determine its effectiveness. For example, the UK government aims to increase loft insulation to curb carbon dioxide emissions and improve energy efficiency. They discovered that take-up increased threefold when they offered a service (payable) to clear lofts. Such insights are also important where individual behaviour influences the achievement of common objectives, in areas like sustainable development, prevention of child obesity, or energy efficiency. Behavioural insights are currently being used to increase tax compliance, reduce energy consumption or discourage behaviours (such as smoking, binge drinking) that incur significant costs for society. The Commission continues to study and harness this extraordinary science in order to deliver policy options that take account of citizens’ everyday needs, experiences and behaviour. We currently have six studies under way on topics ranging from energy labelling to package travel, from bank-account transparency to car-emissions labelling. The results will help to design policy that delivers maximum benefit for Europeans at minimum cost. By ‘road-testing’ policy interventions, we can avoid time-consuming and sometimes expensive mistakes. Behavioural insights may identify a non-legislative approach as more effective than new regulation or tell us why legislation failed to achieve its desired result. It may reveal unexpected or paradoxical impacts (eg, when financial advisers disclosed the commission they would receive, their clients trusted them less, and rejected advice even when they would have been better off following it). As such, behavioural economics can play an important role in achieving the Commission’s aim of smarter legislation. Paola Testori Coggi Director-general for health and consumersEuropean CommissionBrussels In response to the call from Alberto Alemanno in his article “Nudging Europe” (16-22 May), I am happy to confirm that the European Commission supports the study and application of behavioural insights for policymaking. Indeed, it has been using this approach since 2008. In fact, the European Commission was one of the first public administrations to apply behavioural evidence on default choices, when it limited the use of pre-checked boxes in consumer contracts (October 2008). For instance, once the consumer-rights directive is transposed into national law, 500 million European consumers will be better protected against their default bias. This means that in future when you make a hotel booking online, you should not be offered breakfast or cancellation insurance by default. Your money should stay in your pocket by default, unless you consciously decide otherwise. This represents a significant change of approach and is just one of the ways in which the Commission has been using behavioural insights for better policymaking in recent years. In 2010, the Commission used behavioural insights in the competition case concerning the bundling of Microsoft’s Internet Explorer with the Windows operating system. The result was an unusual but effective remedy that was simple and user-friendly. Users of Windows-based personal computers were given the option to choose an alternative browser, via an on-screen ballot box. One in four users who viewed the ballot box downloaded an alternative browser. A simple device, at minimal programming cost to Microsoft, made the EU market for browsers more competitive and innovative (in Europe, both Chrome and Firefox now have larger market shares than Internet Explorer).