Unbundling and Behavioral Economics

Nice little post here from the blog “Unbundling as a Pricing Strategy.”  It’s a good example of applying choice architecture and libertarian paternalism to everyday choices that cary with them much grander consequences.

“When people see a 5 cent charge per bag they are more than likely to bring their own bags than if there were given a credit for each bag.”

Nudges and Intentionality

I just finished Thaler and Sunstein’s Nudge.  Though my enthusiasm faded a bit as the book wore on, I have to admit that the concept of choice architecture that they explore is one of the most exciting ideas that I’ve encountered in a long time.  So exciting, in fact, that I would consider making a career of it (in some ways I already am).

Enthusiasm aside, as I finished the last chapter on “Objections” tonight, I was struck by one of the authors’ comments.  

They discuss the objection that policymakers should always attempt to be neutral.  Well, the premise of the book rests largely on the fact that many of us are choice architects, even though we may not realize it.  We are involved in designing the environments in which people make decisions.  Therefore we influence decisions, whether we like it or not.  So we might as well be intentional in how we go about our design.

What struck me about the neutrality discussion was the assumption that neutrality somehow denotes innocence.  For some reason, as a society we forgive neutrality and punish or reward intentionality (depending on how things turn out).  So if I kill someone unintentionally – in a car accident, for example – I am treated differently than if I kill someone in a premeditated fashion.  The first is likely to somehow be a result of negligence, while the second is a result of something much more insidious.  In this way, they are different.  Yet, both result in the same outcome.  

Along the same lines, choice architects who drive us toward stupid decisions unintentionally are somehow innocent.  Yet, those who drive us toward bad decisions intentionally are somehow evil because they game the system.  

This seems a bit strange to me.  Maybe it shouldn’t.  But  I would prefer a set of cultural norms that places slightly greater emphasis on personal awareness and responsibility.  

If you drive, you drive safely.  If you nudge, nudge intentionally.

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