behavioural policy

Question 1

what is present biased

Answer 1

when people focus on benefitting in the short term rather than the long term

Question 2

types of behavioural policy

Answer 2

1. banning
2. financial incentives such as taxation
3. influencing choice

Question 3

how can choice be influenced

Answer 3

information provision - putting cals on menus
changes to default- automatic enrolment into pensions
changes to environment -fewer lifts in buildings

Question 4

4 factors to consider when changing behaviour

EAST

Answer 4

1. making things Easier
2. attractive
3. social influence
4. timely intervention

Question 5

evaluation of nudge theory

Answer 5

1. it may help alter minor behaviour but may not be powerful enough to prevent deeper social problems such as alcoholism
2. it assumes an effective sample was carried out

Question 6

what is system one thinking

Answer 6

fast and immediate

eg catching a ball

Question 7

what is system two thinking

Answer 7

slow and deliberate

when the decision is important

Question 8

what is default biased

Answer 8

people may not change

Question 9

bounded rationality

Answer 9

don’t have brain capacity to make a decision

for example people have limited attention and may choose to use rule of thumb

Question 10

what is a heuristic

Answer 10

mental short cuts (rule of thumb) to help make a decision quickly for a satisfactory outcome rather than a perfect outcome

Question 11

priming

Answer 11

implementing cues that work subconsciously to encourage people to behave a certain way