Behavioural economics and economic policy

Question 1

What is choice architecture?

Answer 1

Choice architecture refers to the design of different ways in which choices can be presented to consumers, influencing their decisions through structure and context.

Question 2

What is the framing effect?

Answer 2

The framing effect occurs when the way information is presented (the “frame”) influences an individual’s decision, leading to different choices based on wording or context.

Question 3

What are nudges in behavioral economics?

Answer 3

Nudges are subtle changes in the environment or presentation of choices that encourage individuals to make decisions that are in their best interest without restricting options.

Question 4

What are default choices?

Answer 4

Default choices are pre-set options that take effect if individuals do not actively choose otherwise, often leading to higher participation rates in programs (e.g., opt-in vs. opt-out systems).

Question 5

What is mandated choice?

Answer 5

Mandated choice requires individuals to make a decision from a set of options, ensuring engagement and active choice, often used in organ donation policies.