Tuesday, August 04, 2009

Long Range: Does choice work?

OK, time to start dipping back into this series. For new readers, Long Range is my attempt to examine why some people are able to successfully think further into the future than others.

My first set of posts on this topic got slightly sidetracked when Billy and Mike both raised the reasonable point that people don't make the best decisions possible - that our judgments have biases and irrationalities built into them. So, as well as looking at some of my social psychology texts, there's also going to be some study of the following books in the near future:

Nudge
Stumbling on Happiness
Predictably Irrational

Nudge is an interesting book, because (as I understand it from listening to one podcast) it postulates that you can give people choices, but you get 'better' results when you constrain people to a 'choice architecture' that's been designed to guide people towards an optimal result.

Here's a local situation to illustrate the difference. The previous Labour-led government wanted to introduce legislation that eliminated conventional lightbulbs from the marketplace, replacing them with more efficient compact fluorescent light (CFL) bulbs.

Recently, the Electricity Commission announced the launch of rightlight.govt.nz, a website to provide tools and information to help families and businesses reduce their power bills and choose the right efficient light for the particular application.

State-imposed constraints versus freedom of choice. I am fascinated to see if the rightlight initiative has an noticeable impact, as (I believe) people will buy the cheapest thing. The lower prices of conventional bulbs will be more appealing to consumers than any projected long range benefits of buying CFLs.

So the question I think I'll be looking at (occasionally) over the next few months is 'Does choice work?'
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