Social Dilemmas and Nudging

Question 1

Social dilemmas

Answer 1

A conflict between (immediate) self-interest and collective interests
→Cooperation (what is better for all)
→Defection (what is best for the self)
A situation in which the single individual profits from selfish behavior unless everyone chooses the selfish alternative, inwhichcase the whole group loses
EX. Over-fishing; paying taxes, The use of public transport

Question 2

Dawes (1975)

Answer 2

1.Each person has available a dominating strategy (i.e., one that yields the person the best payoff in ALL circumstances)
2. Collective choice of dominating strategies results in a deficient outcome(an outcome that is less preferred by all persons than the result that would have occurred if all had not chosen their dominating strategy)
Crucial aspect: There is a strategy that results in a deficient outcome for all the persons involved but is attractive for the person who chooses it(since it yields the best payoff)

Question 3

NUDGE

Answer 3

The gentle power.
“… any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives”…any small feature in the environment that attract our attention and affect our behavior

Question 4

Nudge aim

Answer 4

To guide people’s behavior towards better choices, as judged by themselves, without restricting the diversity of choices
→Easy and cheap
▪People’s decisions are imperfect(especially when there is no experience, no information, slow or infrequent feedback)
▪Sometimes it is impossible to avoid to influence people’s choice(a neutral architecture of choice does not exist)
▪Nudging does not involve coercion

Question 5

Choice architecture

Answer 5

is the design of different ways in which choices can be presented to consumers, and the impact of that presentation on decision making.

• Defaults
• Expected errors
• Give feedback
• Mapping

Question 6

Libertarian paternalism

Answer 6

It is legitimate to try to influence people’s behavior in order to make their lives longer, healthier, and better. Keep the choice OPEN. People should be free to do what they like, to choose what they prefe