Probabilistic refunds increase beverage container recycling behaviour in British Columbia and Alberta, Canada

Abstract

Of the two trillion beverage containers produced globally every year, most are not recycled. To increase recycling rates, the bottle deposit refund system has been proposed and implemented in some regions of the world with varying degrees of success. To improve the refund system, we leverage a classic decision-making phenomenon where low-probability high rewards are preferred over small certain rewards with the same expected payoff. Specifically, we turned an established certain but small refund for recycling beverage containers (i.e., 100 % chance of getting $0.10 per bottle) into a probabilistic one (e.g., 0.01 % chance of getting $1,000 per bottle) with the same expected payoff. In three pre-registered field and lab studies (N = 975 total), we showed that participants preferred a probabilistic refund option (0.01 % chance of getting $1,000) over the certain option (100 % chance of getting $0.10), felt happier about the opportunity to get money when they chose the probabilistic refund option, and brought 47 % more bottles to recycle when the probabilistic refund was offered. These findings highlight the value of probabilistic refunds in increasing recycling behaviour and provide theoretical and practical implications for recycling policies and programs.