05_P & B - Chapter 06

Decision-making and behavior can be influenced by …

• Changing attitudes and changing the decision-making process (focus on the decision-maker)
• Designing the decision-making environment (focus on contextual cues = choice architecture)

Choice architecture:
Examines how decisions can be influenced by designing decision-making environment

Choice architecture uses tools to influence decision making. These tools are sometimes called nudges.

• Nudges are ways of influencing choice without limiting the choice set or making alternatives appreciably more costly in terms of time, trouble, social sanctions, and so forth. They are called for because of flaws in individual decision-making, and they work by making use of those flaws.
• A nudge is any attempt at influencing behavior in a predictable way
  without forbidding any previously available courses of actions or making
  alternatives appreciably more costly in terms of time, trouble, social
  sanctions, and so forth.

There is no neutral decision-making environment: you cannot not influence -> 

One is not forced to make a decision a certain way or to display a certain behavior but
by designing the decision-making environment, a nudge is given into a specific
direction

Is applied in all areas of life where decisions are made:
Conscious application of the principles of choice architecture in product design, marketing and politics (e.g. placement of stairs and elevator at FHNW in Olten)

on mistakes/bugs in the decison making process -> Humans frequently decide irrationally and not in their best interest:

• Humans struggle to judge risk correctly
  -> e.g. Overestimate risks (e.g. buying insurance that is not really useful)
  -> we protect us not against risks we should (vaccination against covid) 

• Humans struggle to pass on short-term utility for long-term utility -> Saving or not saving money / invest money that it multiple 

• Humans avoid complex decisions and stick to status quo -> they cannot decide -> e.g. saving plan for retirement

-> Choice architecture can help us to find the best choice for ourselfes

• Designing the decision-making environment -> this can leads to a certain desicion
• Choice architecture can help us to find the best choice for ourselfes
• CA influencing the choice without limiting the choice set, making alternatives negatively change the alternatives in terms of time, trouble, social
  sanctions
• Is applied in all areas of life where decisions are made
• There is no neutral decision-making environment: you cannot not influence (the way food is presented in a restaurant on a self-service buffet)

see picture

Decisions are influenced more effectively if both system 1 and system 2 are addressed, thus appealing to emotions and intuition as well as using facts and arguments

-> This insight should be utilized when applying Choice Architecture

see picture attached