Behavioural economics and economic policy Flashcards
What is framing?
the way people are influenced by how information is described and presented
Whast does framing a question or choice in a different way generate?
a new response by changing the comparison set it is viewed in
What is asymmetric framing?
involves including an obviously inferior 3rd choice rather then a simple expensive/ cheap choice can guide consumers to more expensively- priced items
What is defualt choice>
an option that is selected automatically unless an alternative is specified
What is mandated choice>
where people are required by law to make a decision
What is restricted choice?
offers people a limited amount of options, offering too many choices is unhelpful and leads to poor decisions
What is a nudge?
technique used by choice architects in order to change someones behaviour in a very easy and low cost way
- aim to change behaviour of consumers without taking away their freedom
WHat are shove policies?
instruct people to behave in certain ways
what are some evaluations of behavioural nudges?>
- nudges can be viewed as manipulative and consumers do not get free choice
- nudges may wear off over time
- impact of nudges are contextual
- sanctions are more effective
- interventions are more effective
What is priming>
- changing behaviour from cues that work subconsciously and prime us to choose in certain ways
What are the key ways to make behavioural policies effective?
- make it more easy to change behaviour
- make it more attractive to change behaviour
- social influence and changing behaviour
- timely interventions
How do you make it easier to chnage behaviour?
- changing defaults
- simplify messages
- using specialised container lids (recycling)
- lowering friction costs
- increasing friction costs
How do you make it more attractive to change behaviour?
- avoid labelling food as vegetarian (meat eaters have a heuristic to ignore the option)
- place less attractive items in the menu to make the firms desired option more attractive
