Monday, January 26, 2015

Deciding by default

Choosing Not to Choose. Understanding the Value of Choice

The core of the application of behavioural economics to decision making on health lies in my opinion in choice architecture. I explained that 2 years ago in this post. Now Cass Sunstein is providing us with a new book that shows the details and rules for "choosing no to choose", a must read.
The choice among impersonal default rules, active choosing, and personalized default rules cannot be made in the abstract.To know which is best, both choosers and choice architects need to investigate two factors: the costs of decisions and the costs of errors (understood as the number and magnitude of mistakes). An understanding of those kinds of costs does not tell us everything that we need to know, but it does help to orient the proper analysis of a wide range of problems.
It should be obvious that a default rule can much reduce the costs of decisions. When such a rule is in place, people do not need to focus on what to do; they can simply follow the default. But a default rule can also increase the costs of errors, at least if it does not fit people’s situations; it can lead them in directions that make their lives go worse.

In approaching the underlying issues, he shows five propositions. I'm right now in the middle of the book. I can't have a final opinion, however I'm sure that this will be a key reference for the future.

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