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estate, stocks, bonds, etc.), while examples of partitioning attributes include the manner in which attributes are grouped together for example a label may group several related attributes together (e.g. convenient) or list them individually (e.g. short running time, little cleanup, low maintenance). The number and type of these categories is important because individuals have a tendency to allocate scarce resources equally across them. People tend to divide investments over the options listed in 401K plans they favor equal allocation of resources and costs across individuals (all else being equal), and are biased to assign equal probabilities to all events that could occur. As a result, aggregate consumption can be changed by the number and types of categorizations. For instance, car buyers can be nudged toward more responsible purchases by itemizing practical attributes (gas mileage, safety, warranty etc.) and aggregating less practical attributes (i.e. speed, radio, and design are grouped together as "stylishness").
360:, expecting error, understanding mappings (which involves exploring the different ways that information presentation affects option comparisons), giving feedback, structuring complex choices, and creating incentives. Another group of leading behavioral scientists has created a typology of choice architecture elements dividing them into those that structure the choice set and those that describe the choice. Examples of choice set structuring include: the number of alternatives, decision aids, defaults, and choice over time. Describing choice options include: partitioning options and attributes, and designing attributes. The most prominent element amongst those listed above is said the be the use of defaults as it preselects the option that is in the best interest of the consumer, firm, or potentially both.
563:(for example, 60 minutes of physical activity each day) that promote physical wellness can be assessed and the consequences of not meeting these recommendations are well researched and observable. Thus, the use of choice architectures to promote healthy decisions can be easily justified. Though typically choice architecture is implemented with the intention of nudging consumers to socially and personally desirable choices, they can sometimes increase firm profits while decreasing consumer welfare. One way of assessing how a consumer is impacted in this case, is to evaluate consumer experiences after the choice has been made both in the short and long-term.
546:
Choice
Engineering is a creating of processes or environment in which project managers would be steered towards making better choices rather than mandating these choices. The examples of such processes would be using checklists and templates, introducing project audit rather than direct control, providing full disclosure of information for project team members, improving project management education, and other processes. Virine and Trumper argued that in many cases, especially for smaller projects, it would be more beneficial to use Choice Engineering rather than strict and complex project management processes.
501:, consumers may face similar challenges in weighing many attributes to those of evaluating many choices. As a result, choice architects may choose to limit the number of attributes, weighing the cognitive effort required to consider multiple attributes against the value of improved information. This may present challenges if consumers care about different attributes, but online forms that allow consumers to sort by different attributes should minimize the cognitive effort to evaluate many options without losing choice.
417:, but also have the power to subtly shape decisions dependent upon what products are presented, the context of the presentation, and the way that they are ranked and ordered. For example, research on consumer goods like wine has shown that the expansion of online retailing has made it simpler for consumers to gather information on products and compare alternatives, making them more responsive to price and quality information.
514:
non-linear metrics (including monthly credit payments or miles per gallon) into relevant linear metrics (in this case the payback period associated with a credit payment or the gallons per 100 miles). Choice architects can also influence decisions by adding evaluative labels (e.g. good versus bad or high versus low) to numerical metrics, explicitly calculating consequences (for instance translating energy consumption into
469:, preferring positive outcomes in the present often at the expense of future outcomes. This may lead to behaviors like overeating or overspending in the short-term at the expense of longer-term health and financial security outcomes. In addition, individual projections about the future tend to be inaccurate. When the future is uncertain they may overestimate the likelihood of
453:
gathered about specific consumers. Choices that are made repeatedly may also be affected by defaults, for instance, persistent defaults may be continually reset regardless of past decisions, whereas reoccurring defaults "remember" past decisions for use as the default, and predictive defaults use algorithms to set defaults based upon other related behavior.
542:. Choice architecture has been implemented in several public and private policy domains. Variants of the Save More Tomorrow Plan (conceived by Richard Thaler and Shlomo Benartzi), which has individuals commit in advance to allocate a portion of future salary increases to savings, have been adopted by companies to increase employee retirement savings.
429:. A default is defined as a choice frame in which one selection is pre-selected so that individuals must take active steps to select another option. Defaults can take many forms ranging from the automatic enrollment of college students in university health insurance plans to forms which default to a specific option unless changed.
554:
Choice architecture interventions may fail to produce their desired result for several reasons. First, individual differences may lead consumers to respond differently to information. For example, liberals and conservatives have been shown to respond differently to information about the environmental
456:
One of the most commonly cited studies on the power of defaults is the example of organ donation. One study found that donor registration rates were twice as high when potential donors had to opt out versus opt into donor registration. However, the influence of defaults has been demonstrated across a
408:
Choice architects may choose to limit choice options; however, limits to choice may lead to reductions of consumer welfare. This is because, the greater the number of choices, the greater the likelihood that the choice set will include the optimal choice for any given consumer. As a result, the ideal
278:
consumers toward personally and socially desirable behaviors like saving for retirement, choosing healthier foods, or registering as an organ donor. These interventions are often justified by advocates of libertarian paternalism in that well-designed choice architectures can compensate for irrational
562:
A second major challenge is assessing whether choice architectures are, in fact, improving decision-making and making people better off as
Sunstein and Thaler propose. Questions arise in regards to what constitutes someone as better off and where this standard might come from. Heath recommendations
488:
The ways in which options and attributes are grouped influence the choices that are made. Examples of such partitioning of options include the division of a household budget into categories (e.g. rent, food, utilities, transportation etc.), or categories of investments within a portfolio (e.g. real
452:
Types of default include simple defaults where one choice is automatically selected for all consumers, forced-choice in which a product or service is denied until the consumer makes a proactive selection, and sensory defaults in which the choice is pre-selected based upon other information that was
545:
Lev Virine and
Michael Trumper applied choice architecture concept to project management. They proposed Choice Engineering as a choice architecture-related framework for improving project decisions. Project managers make predictable, repeated mental mistakes which could lead to project failures.
409:
number of alternatives will depend upon the cognitive effort required to evaluate each option and the heterogeneity of needs and preferences across consumers. There are examples of consumers faring worse with many options rather than fewer in social-security investments and
Medicare drug plans
346:" individuals toward choices that are in their best interest without forbidding options or significantly changing their economic incentives. They go further to say that completely restricting options is no longer a nudge, but simply making something more obvious amongst a group of choices is.
513:
associated with processing and reduce errors. This can generally be accomplished by increasing evaluability and comparability of attributes. One example is to convert commonly used metrics into those that consumers can be assumed to care about. For example, choice architects might translate
412:
As consumption decisions increasingly move online, consumers are relying upon search engines and product recommendation systems to find and evaluate products and services. These types of search and decision aids both reduce the time and effort associated with
291:
and the White House "Nudge Unit" for example. While many behavioral scientists stress that there is no neutral choice-architecture and that consumers maintain autonomy and freedom of choice despite manipulations of choice architecture, critics of
448:
might be at work, or consumers may fail to opt-out of the default due to associated effort. It is important to note that these mechanisms are not mutually exclusive and their relative influence will likely differ across decision contexts.
892:
404:
or the tyranny of choice. However, the importance of this effect appears to vary significantly across situations. Choice architects can reduce choice overload by either limiting alternatives or providing decision support tools.
395:
have shown that in some instances presenting consumers with many choices can lead to reduced motivation to make a choice and decreased satisfaction with choices once they are made. This phenomenon is often referred to as
356:
Behavioral scientists have grouped the elements of choice architecture in different ways. For example, Thaler, Sunstein, and John P. Balz have focused on the following "tools" of choice architecture:
538:. Choice Architecture is also similar to the concept of "heuristics," or manipulation that changes outcomes without changing people's underlying preferences, described by political scientist
376:
that may lead to decision errors. The following sections describe these biases and describe the ways that they can be minimized by changing decision context through choice architecture.
896:
334:. Thaler and Sunstein have endorsed thoughtful design of choice architecture as a means to improve consumer decision-making by minimizing biases and errors that arise as the result of
473:
or desirable outcomes, and are generally overly optimistic about the future, for example assuming that they will have more time and money in the future than they will in actuality.
391:, or at least leave it unchanged. However, each additional choice demands additional time and consideration to evaluate, potentially outweighing the benefits of greater choice.
476:
However research indicates that there are several ways to structure choice architecture to compensate for or reduce these biases. For example, researchers demonstrated improved
480:
by drawing attention to the future outcomes of decisions or by emphasizing second best options. In addition, limited time offers can be successful in reducing procrastination.
1806:
Burson, K.A.; Larrick, R.P.; Lynch, J.G. (2009). "Six of one, half dozen of the other: expanding and contracting numerical dimensions produces preference reversals".
873:
432:
Several mechanisms have been proposed to explain the influence of defaults. For example, individuals may interpret defaults as policymaker recommendations,
774:
1601:
Fox, C.R.; Clemen, R.T. (2005). "Subjective probability assessment in decision analysis: partition dependence and bias toward the ignorance prior".
588:
is the idea that it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice.
938:
1981:
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agents, for example by limiting choice or undermining respect for individual human agency and moral autonomy. Moreover, it can result in
1235:
Brown, C.L.; Krishna, A. (2004). "The skeptical shopper: a metacognitive account for the effects of default options on choice".
654:
224:
186:
835:
Cronqvist, H; Thaler, R (2004). "Design choices in privatized social security systems: Learning from the
Swedish experience".
1057:
465:
Choices with outcomes that manifest in the future will be influenced by several biases. For example, individuals tend to be
1451:
Zauberman, G.; Lynch, J.G. (2005). "Resource slack and propensity to discount delayed investments of time versus money".
114:
1220:
Smith, N.C; Goldstein, D.; Johnson, E. (2013). "Choice without awareness: Ethical and policy implications of defaults".
1182:
Lynch, John G.; Ariely, Dan (2000). "Wine Online: Search Costs Affect
Competition on Price, Quality, and Distribution".
80:
1585:
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675:
937:
Johnson, Eric J.; Shu, S.B.; Dellaert, B.G.C.; Fox, C.; Goldstein, D.G.; Haeubl, G.; Larrick, R.P.; Payne, J.W.;
813:
497:
Consumers would optimally consider all of a product's attributes when deciding between options. However, due to
1416:
Kahneman, D.; Lovallo, D. (1993). "Timid choices and bold forecasts: a cognitive perspective on risk taking".
2055:
1073:
Iyengar, S.S.; Lepper, M.R. (2000). "When choice is demotivating: can one desire too much of a good thing?".
893:"Head of White House "Nudge Unit" Maya Shankar Speaks about Newly Formed Social and Behavioral Sciences Team"
287:. These techniques have consequently become popular among policymakers, leading to the formation of the UK's
576:
is a person who frames the options (for example, someone who chooses how allied products are displayed in a
1849:
1533:
Benartzi, S.; Thaler, R. (2001). "Naive
Diversification Strategies in Defined Contribution Saving Plans".
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Fox, C.R.; Rottenstreich, Y. (2003). "Partition priming in judgement in judgement under uncertainty".
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Johnson, E.J.; et al. (1993). "Framing, probability distortions, and insurance decisions".
518:), or by changing the scale of a metric (for instance listing monthly cost versus yearly cost).
1082:
466:
1708:"Numeracy skill and the communication, comprehension, and use of risk and benefit information"
526:
The concept of choice architecture exists in a number of fields. See for example the work of
2009:
1707:
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Martin, J.M.; Norton, M.I. (2009). "Shaping online consumer choice by partitioning the web".
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1943:"Do Nudges Reduce Disparities? Choice Architecture Compensates for Low Consumer Knowledge"
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941:; Wansink, B.; Weber, E.U. (2012). "Beyond Nudges: Tools of a choice architecture".
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Mrkva, Kellen; Posner, Nathaniel A.; Reeck, Crystal; Johnson, Eric J. (July 2021).
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1758:"Bringing meaning to numbers: the impact of evaluative categories on decisions"
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1272:"The power of suggestion: inertia in 401(k) participation and savings behavior"
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676:"Can there ever be too many options? A meta-analytic review of choice overload"
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A large body of research has shown that, all things being equal, consumers are
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can be presented to decision makers, and the impact of that presentation on
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1488:"Asymmetric discounting in intertemporal choice: a query theory account"
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Choice
Architecture in Democracies: Exploring the Legitimacy of Nudging
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527:
401:
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has also been linked to different responses to choice architectures.
1776:
1135:"Comparison Friction: Experimental Evidence from Medicare Drug Plans"
880:. Princeton, New Jersey: Princeton University Press. pp. 428–39.
509:
The presentation of information about attributes can also reduce the
387:
predicts that providing more options will generally improve consumer
1884:"Political Ideology Affects Energy-Efficiency Attitudes and Choices"
1394:
1340:
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Mitchell, Gregory (2005). "Libertarian
Paternalism is an Oxymoron".
1381:
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1248:
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388:
995:
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876:; Sunstein, Cass R.; Balz, John P. (2013). Shafir, Eldar (ed.).
241:
1850:"Behavioral economics can help you save money - Jul. 24, 2008"
1050:
Nudge: improving decisions about health, wealth, and happiness
342:", a philosophy endorsed by Thaler and Sunstein that aims to "
331:
Nudge: Improving
Decisions about Health, Wealth, and Happiness
274:
have endorsed the deliberate design of choice architecture to
673:
555:
consequences of energy-related behaviors, while individual
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often argue that choice architectures designed to overcome
16:
Physical and psychological environment affecting the choice
1568:
Messick, D.M. (1993). "Equality as a decision heuristic".
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ProjectThink: Why Good Managers Make Poor Project Choices
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on computers as persuasive technologies; the concept of
1940:
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1341:"Explanation, imagination, and confidence in judgement"
483:
1219:
936:
727:
Larrick, R.P.; Soll, J.B (2008). "The MPG Illusion".
1980:
Sunstein, Cass R.; Thaler, Richard H. (9 May 2003).
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range of domains including investment and insurance
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372:has shown that individuals tend to be subject to
349:Libertarian paternalism may also be described as
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1888:Proceedings of the National Academy of Sciences
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320:The term "choice architecture" was coined by
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1982:"Libertarian Paternalism Is Not An Oxymoron"
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1075:Journal of Personality and Social Psychology
255:the manner in which attributes are described
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878:The Behavioral Foundations of Public Policy
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240:is the design of different ways in which
1570:In Psychological Perspectives on Justice
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1048:Thaler, Richard; Sunstein, Cass (2008).
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1120:The paradox of choice: why more is less
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773:Johnson, E.J.; Goldstein, D.G. (2003).
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1863:Virine, Lev; Trumper, Michael (2013).
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655:Social engineering (political science)
248:. For example, each of the following:
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1383:Journal of Behavioral Decision Making
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427:more likely to choose default options
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484:Partitioning options and attributes
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115:Social and Behavioral Sciences Team
13:
1765:Journal of Experimental Psychology
1453:Journal of Experimental Psychology
1270:Madrian, B.C.; Shea, D.F. (2001).
978:Northwestern University Law Review
338:. This approach is an example of "
81:Affordable Care Act tax provisions
14:
2072:
2019:
1486:Weber, E.U.; et al. (2007).
1820:10.1111/j.1467-9280.2009.02394.x
1756:Peters, E.; et al. (2009).
1706:Peters, E.; et al. (2007).
1504:10.1111/j.1467-9280.2007.01932.x
895:. thepsychreport. Archived from
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1306:Journal of Risk and Uncertainty
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1133:Kling, J.; et al. (2012).
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252:the number of choices presented
1279:Quarterly Journal of Economics
1139:Quarterly Journal of Economics
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1:
2026:Interview with Richard Thaler
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549:
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1578:10.1017/CBO9780511552069.003
1237:Journal of Consumer Research
683:Journal of Consumer Research
266:. As a result, advocates of
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1357:10.1037/0033-2909.110.3.499
615:Framing effect (psychology)
592:
521:
493:Avoiding attribute overload
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368:Research from the field of
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258:the presence of a "default"
197:Design for behaviour change
10:
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1465:10.1037/0096-3445.134.1.23
1291:10.1162/003355301753265543
1196:10.1287/mksc.19.1.83.15183
1097:10.1037/0022-3514.79.6.995
1031:"Designing better choices"
298:irrational decision biases
192:IT-backed authoritarianism
1052:. Yale University Press.
955:10.1007/s11002-012-9186-1
775:"Do Defaults Save Lives?"
289:Behavioural Insights Team
109:Behavioural Insights Team
1959:10.1177/0022242921993186
1727:10.1377/hlthaff.26.3.741
1681:Psychology and Marketing
1535:American Economic Review
1222:Journal of Public Policy
849:10.1257/0002828041301632
837:American Economic Review
620:List of cognitive biases
516:greenhouse gas emissions
380:Reducing choice overload
128:Nudge theory in business
1909:10.1073/pnas.1218453110
1650:10.1111/1467-9280.02431
794:10.1126/science.1091721
741:10.1126/science.1154983
585:Libertarian paternalism
340:libertarian paternalism
310:Principal–agent problem
294:libertarian paternalism
268:libertarian paternalism
177:Libertarian paternalism
1882:; Larrick, R. (2013).
1615:10.1287/mnsc.1050.0409
1345:Psychological Bulletin
1339:Koehler, D.J. (1991).
505:Translating attributes
281:decision-making biases
272:asymmetric paternalism
1808:Psychological Science
1638:Psychological Science
1492:Psychological Science
1118:Schwartz, B. (2004).
499:cognitive constraints
393:Behavioral economists
2056:Political philosophy
1947:Journal of Marketing
1430:10.1287/mnsc.39.1.17
645:Public choice theory
532:permission marketing
370:behavioral economics
300:may impose costs on
157:Behavioral economics
86:Social Credit System
1994:10.2139/ssrn.405940
1900:2013PNAS..110.9314G
1547:10.1257/aer.91.1.79
1122:. New York: Harper.
899:on 16 November 2018
788:(5649): 1338–1339.
610:Framing (economics)
385:Classical economics
336:bounded rationality
328:in their 2008 book
238:Choice architecture
182:Choice architecture
103:Government agencies
70:Government programs
22:Part of a series on
2061:Selling techniques
2041:Behavioral finance
1603:Management Science
1418:Management Science
1318:10.1007/BF01065313
1151:10.1093/qje/qjr055
874:Thaler, Richard H.
415:information search
374:predictable biases
187:Social engineering
2051:Libertarian terms
1693:10.1002/mar.20305
1184:Marketing Science
1059:978-0-300-12223-7
1035:Los Angeles Times
943:Marketing Letters
650:Selling technique
625:Mental accounting
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812:. Archived from
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574:choice architect
540:William H. Riker
534:as described by
511:cognitive effort
461:Choice over time
446:endowment effect
434:cognitive biases
351:soft paternalism
285:consumer welfare
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151:Related concepts
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578:supermarket
567:Terminology
436:related to
283:to improve
172:Paternalism
91:Vision Zero
2035:Categories
1190:: 83–103.
662:References
640:Propaganda
635:Overchoice
550:Criticisms
536:Seth Godin
528:B. J. Fogg
402:Overchoice
316:Background
1967:0022-2429
1572:: 11–31.
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557:numeracy
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364:Elements
358:defaults
302:rational
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1896:Bibcode
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344:nudge
276:nudge
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1017:help
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