1.2.4 Behavioural economics and economic policy Flashcards
choice architecture
influencing consumer choices by the way the choices are presented.
e.g. opt-out instead of in of organ donation, causes higher percentage of organ donators
Framing
form of choice architecture that influences choices by the way words and numbers are used, e.g. presenting life insurance premium payments as ‘less than £3 per day’ sounds more palatable than £1000 per year.
Nudges
influencing consumer behaviour via the use of gentle suggestions and positive reinforcement
Default choice
influencing consumer behaviour by setting socially desirable choices as default options.
Mandated choice
where people are legally required to make a choice.
e.g. organ donatio for driving licneces or passports
Restricted choice
giving consumers a limited number of options when making a choice.
too much choice can sometimes ‘paralyse’ individuals from making an effective choice