2.4 Behavioural Economics and Economic Policy

What is choice architecture

Refers to the design of decision environments, including how choices are presented, organised, and framed.

What is framing

Refers to the way choices are ways choices are worded or presented, which can affect individuals decisions

What is a nudge

A nudge is a subtle policy shift that encourages people to make decisions that are in their broad self interest without restricting their freedom of choice

What are default choices

Pre-set options that take effect if individuals do not make an active choice

What is restricted choice

Involves limiting the range of options available to simplify decision making

What is mandated choice

Mandated choice requires individuals to make an active decision rather than passively accepting a default