Choice architecture and framing
Choice architecture means deliberately designing the environment where people make decisions. Framing means presenting the same information in different ways to influence what people choose.
Real World
When the UK government switched workplace pensions to automatic enrolment (opt-out rather than opt-in) in 2012, pension participation rose from around 55% to over 85% — the default setting did the work policy incentives alone could not.
Exam Focus
Distinguish nudges (preserve choice, change defaults) from regulation (restrict choice) — examiners award marks for this contrast in policy evaluation questions.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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