choice architecture policies (Nudges) Flashcards
what does choice architecture refer to ?
the intentional design of how choices are presented so as to to influence decision making
what are the types of choice Architecture ?
default choice
restricted choice
mandated choice
how does default choice work ?
Occurs when an individual is automatically signed up to a particular choice
This reduces choice as it means a decision is already made even if no action has been taken
Research has shown that individuals rarely change from the default choice
how does restricted choice work?
when the choices available to individuals are limited, which helps individuals make more rational decisions
E.g. In a cafeteria, if unhealthy food options like sugary drinks are removed and replaced with healthier choices like water, consumers will be more likely to purchase them
what does mandated choices mean?
Mandated choices require individuals to make a specific decision or take a particular action by imposing a requirement or obligation
Mandated choices can be used to ensure compliance with regulations or societal norms, making it necessary for individuals to make certain decisions
E.g. Some countries mandate car insurance, which requires all vehicle owners to make an active decision to choose and purchase car insurance rather than leaving it as an optional choice
advantages of choice architecture
influences behaviour - sed to nudge individuals towards making choices that are in their best interest or align with desired outcomes
simplifies decision making -Well-designed choice architecture can simplify complex decisions by providing clear and understandable option
improved outcomes - can lead to improved outcomes such as encourage healthier eating habits and combatting issues like obesity
enhance decision quality - it can provide guidance, reduce biases, and increase the likelihood of individuals making choices they would consider to be better
Disadvantages of choice architecture
manipulation -attempts to influence people’s decisions without their explicit consent, which may infringe on the principle of free choice
ethical concerns -Individuals may not be aware that their choices are being influenced, or they may not fully understand the consequences of their decisions due to the way choices are presented
potential for bias - Choice architecture is susceptible to biases inherent in the design process and may be used by companies to increase profits
unintended consequences- Changes in the presentation of choices can have unforeseen effects and the outcomes may not align with the original goals
what is the nudge theory ?
its the practice of influencing choices that economic agents make, using small prompts to influence their behaviour
what’re consumer nudges designed for ?
designed to guide people towards certain decisions or actions while still allowing them to have freedom of choice
aim to nudge individuals towards decisions that are considered beneficial for themselves and society as a whole
Ethical considerations should be taken into account to ensure that interventions are not manipulative or coercive
what are the advantages of choice architecture?
cost effective
preserves freedom of choice
improved public health - Nudges can be used effectively to encourage healthier behaviours such as exercising, eating nutritious food, or quitting smoking
better decision making - helps make better decisions by simplifying complex information, providing reminders, or structuring choices
improved sustainability- By influencing individual choices in a subtle way, firms/governments can contribute to broader environmental goals without imposing strict regulations
what are the disadvantages of nudge ?
ethical concerns - nudges can be manipulative
lack of transparency - Nudges often operate behind the scenes, making it difficult for individuals to understand or question the influences shaping their choices
unintended consequences
variable success rate
