We make choices every single day; it is an inevitable action that all living creatures must perform. Choosing to wake up early versus sleeping in, or eating a healthy meal versus an unhealthy meal. Although many of us believe that, past the childhood stage, we have the authority to make these choices, today we have people whose job it is to nudge you in the direction they think best, whether or not we are aware.
Formally this field goes by the name of “choice architecture”, which was made popular by economist Richard Thaler, through his book “Nudge”. Choice architecture emphasizes the design of the various ways in which choices can be presented to consumers, and how that presentation impacts consumer decision-making. We most commonly come across choice architecture through what many of us know to be a “default” option. When you buy a cell phone, for example, it is essentially all set to default, and users must make a choice to change any of the preset options. In this case programmers normally try to predict what the majority of users will do or enjoy, and make that the default.
The book highlights its own term called “libertarian paternalism”, which may seem contradictory since libertarian emphasizes the protection of the individual’s rights, while paternalism emphasizes trying to improve the welfare of people. But choice architects use this term to explain their desire to use polices to make people better off, so that if an individual were to make the same choice with no nudge they would have thought it was a good one.
Thaler and other behavioral experts believe that due to the limitations in neoclassical economic theory, nudges must exist in order for people to make their lives better and safer. Classical economics predicts that providing more options will generally increase consumer utility, or at least leave it unchanged. However each additional choice also demands additional time and consideration to evaluate, which may outweigh some of the benefits of making a quick and effective choice.
There are six principals of good choice architecture. Some of the most important are to expect error and to give feedback. Expecting human error before it occurs can prevent many dangerous situations. An example of this is the “look left look right signs” painted on the sidewalks of busy intersections. Someone crossing the street may subliminally see this and take an extra second to look both ways, but not realize that they only did so because they saw the sign. Another example is when gmail alerts us when we have forgotten to fill in the subject line of an email. People also respond to feedback, which is why programmers and designers are always implementing these types of responses in their software or websites. For example when battery life is low, a screen pops up to tell us to connect before our computer shuts down. These types of feedback alerts can also be used to better the environment, like when we see trash bins labeled as “land fill”, and feel worse about not recycling.
One of the most important economic applications of choice architecture is the “Save More Tomorrow” program, which aims to remind and help employees set aside future pay hikes for retirement. By expecting error, this program asks people if they want to commit now to saving more later, because “all of us have more self-control in the future”.
The ideas and applications of libertarian paternalism are everywhere. The key is to be aware of them and some of the negative implications they might impose, and to trust that the majority of choice architects have our best interests in mind.