Nudges

Factors that encourage people to think and act in a particular way that comply with desirable social norms

Choice Architecture

A framework setting out different ways in which choices can be presented to consumers, and the impact of that presentation on consumers' decision making.

E.g Amazon prime showing free now for 1 month.

Default Choice

An option that is selected automatically unless an alternative is specified

Examples:

• Organ donation - Opt out
• Private pensions - Opt out

Examples

• "The hospital will not lose $125 if you show up"
• "64.5% had declared their income tax on time"

Positives

• People who care strongly are still able to make a decision
• Can influence people to make decisions that are better for the economy
• Cheaper, less opportunity cost

Negatives

• Manipulation - unethical
• Illusion of choice