Going beyond technological fixes

Going beyond technological fixes: Indian administrators could use learnings from behavioural economics to transform policymaking. Here’s how...

CHANGE IS IN THE AIR!
Excerpts:
"We nearly always choose short term over long term, have bounded rationality as well as limited will power and go terribly wrong in assessing risks in high stakes situations. Issues of framing, endowment effect, mental accounting, misremembering and hindsight bias- all make us human and erringly so!
Nudging to make it better
These behavioural fallacies have severe costs in public policy implementation especially in social policies aimed at welfare. Savings plan remain unused, toilets appear less palatable with wide practice of open defecation, immunisation initiatives even when offered free has no takers — all these policy paradoxes can be explained through the choice architecture framework that a behavioural science unit will help propagate.
Behavioural economists have discovered a tool called ‘nudging’ to help us make better choices. So what is nudging? Nudging is effectively prompting us to take a desirable choice out of the many options we face by altering the design of choice. For instance, in a pension plan that makes saving the ‘default’ option, more people are likely to stick with default plan over and above all other choices, making them wealthier in the long term."

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