Sitting on the worktop in Penny Heath’s kitchen is a little imp that exerts a remarkable influence over her behaviour. It doesn’t bark orders or lay down rules. It doesn’t set targets or insist on benchmarks. It simply expresses approval, in the form of a blue light, if Heath is doing well, and disapproval, with a red light, if she is not.

The gadget is a Wattson, a device that constantly measures how much electricity she is using in her house in Cambridge. In many ways, though, it is much more than that. It also encapsulates the coming trend of politics: what one might call the friendly neighbourhood versus the nanny state, the carrot versus the stick.

“I first saw a Wattson when I went to someone’s house for supper,” Heath said. “I thought, ‘That’s interesting – I must have one.’ It now sits in my kitchen and it has changed the way we live – without being too threatening or too bossy.”

Thanks to the Wattson, Heath knows exactly how much electricity a fan oven would consume if left on for a year (£3,000 or more) and what she can save by turning off her computer or television. Now her friends want a Wattson too.

Like millions of others, Heath had found that simply being told she ought to save energy had little effect on her habits – and she actively resents the idea of being punished for disobeying government diktats on environmentalism. Drive a big car? You’re bad – pay a penalty.

“There can be a rather pious approach to it all, which I find off-putting,” she said. “What I like about the Wattson is that it just tells you what you are using. It’s not trying to make you feel guilt. I’m a great one for carrots, not sticks.”

That is a theme whose time has come, according to David Cameron. While Gordon Brown bludgeons us with top-down targets, on-the-spot fines and endless regulation, the Conservative leader wants to adopt a subtle new approach: the power of “social norms”, a phenomenon making waves thanks to a book called Nudge, which is published in Britain this week.

At the heart of social norms, Cameron says, is the idea “that one of the most important influences on people’s behaviour is what other people do”. The majority, it seems, don’t want to be very different from those around them.

Instead they want to belong, and they want to be on the side of the good guys. Give them proper information about the acceptable norm, plus a gentle push in the right direction, and they will change behaviour of their own accord.

The ideas have been mooted before, but some behavioural economists believe the potency of this phenomenon has been underestimated. Now leading politicians, such as Barack Obama, the Democrat candidate for the US presidency, are taking an interest.

Cameron appears to have taken the ideas to heart. “We’ve got to stop thinking that if government tells people what to do, they’ll do it,” he said in a speech earlier this month. “Instead we’ve got to harness the power of social norms to bring about social change.”

The divide was illustrated last week when Labour aired plans for yet another nanny-state initiative – fining householders who fail to recycle enough of their rubbish. In contrast, Cameron announced plans to encourage people to save energy simply by telling people what the typical energy usage is in their area. Research shows that high users would reduce their consumption by gravitating towards the norm.

It sounds too good to be true. Is it more wishful thinking than sensible policy? Can social norms really change our behaviour?

Most of us are not robots or Vulcans. Though sane, rational beings, we often behave illogically. Psychologists’ studies show that, for example, we are much more worried about losing something we possess than we are happy about gaining something new – even if it is of exactly the same value.

In making decisions we often suffer from inertia, preferring the status quo to the unknown new. We are also poor at judging risk, probability and our own capabilities. According to Nudge, written by two American academics, Richard Thaler and Cass Sunstein, 90% of drivers think they are better than the average – a mathematical impossibility.

And, most important, we are strongly influenced by those around us, even though we may think we are not. Nudge gives the example of an experiment in which people are shown a number of lines and asked to identify the two that are the same length.

The answer is clear, and on their own, people make the right choice. However, if participants are told that a majority before them have made another choice, in many cases they will give the same wrong answer.

“Conformity experiments have been replicated and extended in more than 130 experiments in 17 countries,” Thaler and Sunstein note. “It is almost as if people can be nudged into identifying a picture of a dog as a cat as long as other people before them have done so.”

Such findings have convinced the pair that the way information and choices are presented – what they call “choice architecture” – can be a powerful tool for social change. “There does seem to be a lot of interest in this, and, most encouraging to us, that interest is coming from both the left and the right,” Thaler said.

In the UK, Cameron’s team sees it as a way of implementing policies “without recourse to the same old clunking tax and regulatory instruments”. One aide to Cameron said: “There’s no ideological reason why we don’t want to use tax and regulation, but sometimes those things just don’t work as well as you want.”

Numerous nudges, some already in use, should be exploited more, Thaler believes. Even on simple things “good choice architecture can make decision-making easier for individuals”, he said. “We are big fans of the signs on the roads in London warning tourists to ‘look right’ for oncoming traffic. And a well-designed pension savings plan can really improve the investing behaviour of people who know little or nothing about the market.”

Most people have to choose to join a company pension scheme; studies show they are far more likely to do so if presented with a decision to opt out rather than opt in.

Obama is understood to be considering such policies of “auto-enrolment” to solve the problem of the large numbers of American citizens who are without health insurance.

In Spain the system has been used to great effect in organ donation. People are presumed to have agreed to donate their organs unless they choose otherwise. It has worked so well that the UK government is considering a similar system.

Thaler admits such changes can be controversial, so he argues that clever use of choice architecture can find a middle way for organ donation. “We quite like the idea of ‘mandated choice’ in this context,” he said. This does not involve any presumption of opt-in or opt-out. Instead it requires people to make a deliberate choice by tacking the process onto something else, such as applying for a driver’s licence or a passport. That solves the problems of both our inertia and bias in the system.

One of the most striking findings cited in Nudge, and by Cameron, comes from a recent study of social norms by Wes Schultz of California State University. Realising that financial incentives and penalties such as green taxes had a limited effect on behaviour, Schultz set out to analyse how the energy usage of 300 people in San Marcos, California, could be changed for the better by invoking social norms.

He arranged for the participants to be told on their energy bills what the typical usage in the area was.

“Telling people what others are doing does tend to have an effect,” he said. “But there are instances where it can boomerang – if you are using less energy than your neighbours, say by making a sacrifice by not running your air-conditioning, you can feel like a sucker.” The result: your energy consumption goes up, not down, to meet the norm. The same has been found in studies of student drinking. Told how much the norm is, some students drank less, but others started to drink more.

Schultz’s solution was to add a little nudge. Some of the participants in his study had a smiley face added to their bill if they used less energy than the norm and a sad face if they used more. The results were startling. Among the participants receiving the emoticon, the boomerang effect completely disappeared. High users reduced their consumption by even more and low users kept their own down.

Whether such changes can be achieved on a wider scale, and with lasting effect, remains to be seen. Schultz is optimistic. He has just published a study showing how the influence of social norms is underrated. “People often say, ‘I don’t care what other people do – that message doesn’t motivate me.’ But when you look at their actual behaviour, it is motivational,” he said.

In fact his research shows that while people claim social norms are the weakest of influences on them, the evidence indicates they are among the strongest.

“This is coming to the fore in a lot of ideas we are going to be talking about in the months ahead,” one of Cameron’s aides said. “Of course there will be circumstances where harnessing social norms might not work. The existing social norm might not be the one you want. Think of knife crime, perhaps.

“But often social norms are latent, and if you make them explicit, good things can happen.”

In Manchester Dr Tom Bartram is another user of the Wattson who has been surprised at how its gentle nudges have changed his behaviour.

“It’s sitting on my mantelpiece,” he said. “As well as the coloured lights, it can tell you exactly how much electricity you’re using. It’s strange, but I’ve started to compete with my girlfriend to see who can get the lowest reading.”

Who knows? Maybe one day that will become the norm.

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