Behavioral Economics in Action

For information on what behavioral economics is, go to "Rational Consumer Choice and Behavioral Economics"

Choice Architecture

Refers to the deliberate design of choices to consumers. Have you for example noticed how it is very difficult to click "no" on cookie consent popups online? That is a result of choice architecture. 

There are a few ways choice architecture can be done:

• Default choices: If users are by default signed up to an email newsletter, for example, more users will remain than if users had to sign up themselves.

• Restricted choices: By providing fewer choices to consumers, the chance is higher they might pick your desired option.

• Mandated choices: Sometimes consumers may be forced to make a choice.

Nudge Theory

Nudge theory states that people can be "nudged" into making economic decisions without being forced to do it. 

For example, if a store places healthy food at eye level, more people will buy it (people will be nudged into buying it)