Deliberate design of the choice architecture


Assignment:

1-According to Colander (2013), "behavioral economic policy is economic policy based upon models using behavioral economic building blocks that take into account people's predictable irrational behavior." While economic engineering is the economics devoted not only to studying markets, but also to designing markets and other coordinating mechanisms. Unlike behavioral economic policy is based on understanding and predicting irrational behavior in economics, economic engineering is about controlling people's behavior. Example would be using sales on Black Friday to entice the consumer into staying out late and shopping for Christmas presents. This would introduce coordination mechanisms, the methods which coordinates people's wants with other people's desires. Than this leads to Mechanism design, which involves identifying a goal and then designing a mechanism such as a market, social system, or contract to achieve that end.

Source: Colander, D. C. (2013). Economics (9th ed.). Boston: McGraw-Hill/Irwin.

2- A nudge is a deliberate design of the choice architecture that alters people's behavior in predictably positive ways. Some individual in society would argue this denotes the liberty of free will; however the option to choose the undeliberate choice is still an option. The only problem with the nudge technique is the fact of producing a positive outcome. The only reason I saw that producing a positive outcome can be viewed as a negative result, is the agencies that would normally choose to nudge a consumer or group of people. Government agencies would probably be most likely to nudge a group of people, which some would find offensive since I mentioned the whole freedom of choice. However profit companies could care less of nudging a group of people for a positive result unless it would benefit them. Also educators and work centers could use the nudge architecture technique to produce positive results and I would doubt that most people would be offended.

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Microeconomics: Deliberate design of the choice architecture
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