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Much like status quo bias, framing effects are exacerbated by the Human tendency occasionally to be somewhat mindless, passive decision makers.
people were more likely to fulfill their goals if they had made explicit “implementation intentions.”
All organizations work better if everyone is empowered to speak up when the boss is about to make a mistake.
the higher the stakes, the less often we are able to practice.
Much of the time, more money can made by catering to human frailties than by helping people to avoid them.
good design is often no more expensive than bad design.
Our primary mantra is a simple one: if you want to encourage some action or activity, Make It Easy.
In the software example, it is really helpful to know what the recommended settings are. Most users do not want to have to read an incomprehensible manual to determine which arcane setting to select. When choice is complicated and difficult, people might greatly appreciate a sensible default. It is hardly clear that they should be forced to choose.
Small shops compete via curation, while online megastores use navigation tools to make finding and choosing among so many options easy.
Some expenses may increase with freedom. But the costs from overspending are not nearly as high as the gains that freedom provides.
we are confident that the worldwide costs of airline security checks are underestimated because they are not monetized, which is often the case for sludge. More generally, the costs governments impose on their citizens via sludge are often neglected in the design and evaluation of policies.
everyone is in favor of the principle of making the tax code simpler, groups organize to oppose getting rid of the particular tax breaks from which they benefit.
most of our time on earth, we Humans did not have to worry much about saving for retirement; most people died before the problem arose.
the policy was given a less-than-beautiful name: “negative election.” 4 Even a good idea can be killed by a bad label.
Even if they can easily opt out, inertia and procrastination might mean that they will not do so. A bad default can be sticky, especially if its bad aspects (such as the fees charged by the funds) are not very salient.
Forty-three percent of balances are not fully paid off each month (revolvers), while 31 percent are entirely paid off (the rest have no balance or are inactive).
setting up an auto-pay from your bank to the credit card, but only about 15 percent of cardholders use this service to pay their bills.
For diseases such as diabetes, hypertension, and high cholesterol, taking prescribed medication is essential to good health, and failing to do so can create costly medical emergencies. In a well-structured system, the price of these medications would be negative, meaning we would reward patients for adhering to their prescribed medications.
John Rawls’s notion of the veil of ignorance can
Nordhaus has suggested that countries form what he calls Climate Clubs.11 As with other kinds of clubs, such as a tennis club, members would enjoy certain benefits (use of the courts), but would also have to agree to the club rules (no racket throwing, paying dues on time). Failure to follow the rules can get you kicked out of the club. The key to the Climate Club idea, however, is that countries that do not agree to join and follow the rules would be subject to punishment by club members (perhaps via some kind of tariff).
A particular advantage of a carbon tax is that it would create incentives to innovate—for example, by producing cheaper sources of energy that produce little or no carbon emissions. In many nations, incentives, including taxes, have helped spur innovation with respect to solar, wind, and other forms of green energy, and have also helped spur the rise and spread of electric vehicles.
We have stressed that all policies require some choice architecture, just as all products require some kind of design. You don’t have to be Steve Jobs to strive for excellence in design. That includes putting the user experience at the top of the list of things to care about. If one set of people is in charge of how things look and others are in charge of how they work, you end up with those door handles that you want to pull when they need to be pushed. You get built-in sludge.
