Exam 22: Behavioral Economic Policy

Why are decisions that are made infrequently difficult to make? Can you give an example?

What is choice architecture? What role would this concept play in the formation of behavioral economic policy?

What is mechanism design and how is it related to behavioral economics?

What is the incentive compatibility problem? Does the traditional supply/demand model exhibit this problem? Explain.

Why are decisions that have many dimensions difficult to make? Can you give an example?

Traditional economists say that desires are inherent in people; what do behavioral economists say?

What is behavioral economic policy?

What are the three situations in which a nudge can be useful? Give an example of each from your own life, and describe why a "nudge" may have been helpful.

Why is the movement from a nudge policy to a push policy problematic in the opinion of many economists?

Give two examples of the use of the insights of behavioral economics by online retailers.

What is an informational nudge? Give an example.

Traditional economists say that having more makes you happier; what do behavioral economists say?

What is one concern that traditional economists have about behavioral economic policy?

Despite the fact that economists are just starting to incorporate nudges into their recommendations for economic policy, nudges are not a new discovery. Where have nudges been used in the past, and by whom?

What is a default option nudge? Give an example.

How do traditional economists feel about behavioral economic policy? What are three concerns that these economists have about the use of nudge and push policies?

What is the criterion of libertarian paternalism?

What is a push policy?

In the practical application of behavioral economic policy, who is most likely to decide on what nudges will be used? Who is most likely to implement those nudges?