Advertisement

Marketing Letters

, Volume 23, Issue 2, pp 487–504 | Cite as

Beyond nudges: Tools of a choice architecture

  • Eric J. Johnson
  • Suzanne B. Shu
  • Benedict G. C. Dellaert
  • Craig Fox
  • Daniel G. Goldstein
  • Gerald Häubl
  • Richard P. Larrick
  • John W. Payne
  • Ellen Peters
  • David Schkade
  • Brian Wansink
  • Elke U. Weber
Article

Abstract

The way a choice is presented influences what a decision-maker chooses. This paper outlines the tools available to choice architects, that is anyone who present people with choices. We divide these tools into two categories: those used in structuring the choice task and those used in describing the choice options. Tools for structuring the choice task address the idea of what to present to decision-makers, and tools for describing the choice options address the idea of how to present it. We discuss implementation issues in using choice architecture tools, including individual differences and errors in evaluation of choice outcomes. Finally, this paper presents a few applications that illustrate the positive effect choice architecture can have on real-world decisions.

Keywords

Choice architecture Decision support Options and alternatives Describing attributes 

References

  1. Ainslie, G. (2001). Breakdown of will. Cambridge: Cambridge University Press.Google Scholar
  2. Bardolet, D., Fox, C. R., & Lovallo, D. (2009). Naïve diversification and partition dependence in capital allocation decisions: field and experimental evidence. Strategic Management Journal (in press).Google Scholar
  3. Benartzi, R., & Thaler, R. (2001). Naïve diversification strategies in retirement saving plans. American Economic Review, 91, 475–482.CrossRefGoogle Scholar
  4. Benartzi, S., & Thaler, R. (2004). Save more tomorrow: using behavioral economics to increase employee savings. Journal of Political Economy, 112, S164–S187.CrossRefGoogle Scholar
  5. Bodapati, A. V. (2008). Recommendation systems with purchase data. Journal of Marketing Research, 45, 77–93.CrossRefGoogle Scholar
  6. Bond, S. D., Carlson, K. A., & Keeney, R. L. (2008). Generating objectives: can decision makers articulate what they want? Management Science, 54, 56–70.CrossRefGoogle Scholar
  7. Börsch-Supan, A. (2003). Life-cycle savings and public policy: a cross-national study of six countries. New York: Academic.Google Scholar
  8. Brown, J. R. (2007). Rational and behavioral perspectives on the role of annuities in retirement planning. (NBER Working Paper No. 13537). National Bureau of Economic Research, Inc, Cambridge, MA.Google Scholar
  9. Brown, C. L., & Krishna, A. (2004). The skeptical shopper: a metacognitive account for the effects of default options on choice. Journal of Consumer Research, 31, 529–539.CrossRefGoogle Scholar
  10. Burson, K. A., Larrick, R. P., & Lynch, J. G., Jr. (2009). Six of one, half dozen of the other: expanding and contracting numerical dimensions produces preference reversals. Psychological Science, 20, 1074–1078.CrossRefGoogle Scholar
  11. Cook, D. J., & Song, W. Z. (2009). Ambient intelligence and wearable computing: sensors on the body, in the home, and beyond. Journal of Ambient Intelligence and Smart Environments, 1, 83–86.Google Scholar
  12. Cooke, A. D. J., Sujan, H., Sujan, M., & Weitz, B. A. (2002). Marketing the unfamiliar: the role of context and item-specific information in electronic agent recommendations. Journal of Marketing Research, 39, 488–497.CrossRefGoogle Scholar
  13. Costa, D. L., & Kahn, M. E. (2010). Energy conservation nudges and environmentalist ideology: evidence from a randomized residential electricity field experiment. National Bureau of Economic Research, Inc, Cambridge, MA. (NBER Working Paper No. 15939).Google Scholar
  14. Cronqvist, H., & Thaler, R. (2004). Design choices in privatized social security systems: learning from the Swedish experience. American Economic Review, 94, 424–428.CrossRefGoogle Scholar
  15. Davidoff, T., Brown, J. R., & Diamond, P. A. (2005). Annuities and individual welfare. American Economic Review, 95, 1573–1590.CrossRefGoogle Scholar
  16. Dellaert, B. G. C., & Häubl, G. (2012). Searching in choice mode: consumer decision processes in product search with recommendations. Journal of Marketing Research. doi: 10.1509/jmr.09.0481.
  17. Diehl, K., Kornish, L. J., & Lynch, J. G. (2003). Smart agents: when lower search costs for quality information increase price sensitivity. Journal of Consumer Research, 30, 56–71.CrossRefGoogle Scholar
  18. Dinner, I., Johnson, E. J., Goldstein, D. G., & Liu, K. (2011). Partitioning default effects: why people choose not to choose. Journal of Experimental Psychology. Applied, 17, 332–341.CrossRefGoogle Scholar
  19. Fox, C. R., & Clemen, R. T. (2005). Subjective probability assessment in decision analysis: partition dependence and bias toward the ignorance prior. Management Science, 51, 1417–1432.CrossRefGoogle Scholar
  20. Fox, C. R., & Rottenstreich, Y. (2003). Partition priming in judgment under uncertainty. Psychological Science, 14, 195–200.CrossRefGoogle Scholar
  21. Fox, C. R., Bardolet, D., & Lieb, D. (2005). Partition dependence in decision analysis, resource allocation, and consumer choice. In: R. Zwick, & A. Rapoport (Ed.). Experimental business research, volume III. Springer, Dordrecht, 3:229–251.Google Scholar
  22. Fox, C. R., Ratner, R. K., & Lieb, D. (2005). How subjective grouping of options influences choice and allocation: diversification bias and the phenomenon of partition dependence. Journal of Experimental Psychology. General, 134, 538–551.CrossRefGoogle Scholar
  23. Gilbert, D. T., Pinel, E. C., Wilson, T. D., Blumberg, S. J., & Wheatley, T. P. (1998). Immune neglect: a source of durability bias in affective forecasting. Journal of Personality and Social Psychology, 875, 617–638.CrossRefGoogle Scholar
  24. Goldstein, D. G., Johnson, E. J., Herrman, A., & Heitmann, M. (2008). Nudge your customers toward better choices. Harvard Business Review, 86, 99–105.Google Scholar
  25. Hanks, A. S., Just, D. R., & Wansink, B. (2012). Trigger foods alter vegetable and fruit selection in school lunchrooms. Agricultural and Resource Economics Review, 41, 114–123.Google Scholar
  26. Hansen, J. (2009). Storms of my grandchildren: the truth about the coming climate catastrophe and our last chance to save humanity. New York: Bloomsbury.Google Scholar
  27. Hardisty, D. J., Johnson, E. J., & Weber, E. U. (2010). A dirty word or a dirty world? Attribute framing, political affiliation, and query theory. Psychological Science, 21, 86–92.CrossRefGoogle Scholar
  28. Häubl, G., & Murray, K. B. (2003). Preference construction and persistence in digital marketplaces: the role of electronic recommendation agents. Journal of Consumer Psychology, 13, 75–91.Google Scholar
  29. Häubl, G., & Murray, K. B. (2006). Double agents: assessing the role of electronic product recommendation systems. Sloan Management Review, 47, 8–12.Google Scholar
  30. Häubl, G., & Trifts, V. (2000). Consumer decision making in online shopping environments: the effects of interactive decision aids. Marketing Science, 19, 4–21.CrossRefGoogle Scholar
  31. Häubl, G., Dellaert, B. G. C., & Donkers, B. (2010). Tunnel vision: local behavioral influences on consumer decisions in product search. Marketing Science, 29, 438–455.CrossRefGoogle Scholar
  32. Hauser, J. R., & Wernerfelt, B. (1990). An evaluation cost model of consideration sets. Journal of Consumer Research, 16, 393–408.CrossRefGoogle Scholar
  33. Hauser, J. R., Urban, G. L., Liberali, G., & Braun, M. (2009). Website morphing. Marketing Science, 28, 202–223.CrossRefGoogle Scholar
  34. Hsee, C. K., & Hastie, R. (2006). Decision and experience: why don't we choose what makes us happy? Trends in Cognitive Sciences, 10, 31–37.CrossRefGoogle Scholar
  35. Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: can one desire too much of a good thing? Journal of Personality and Social Psychology, 79(6), 995–1006.CrossRefGoogle Scholar
  36. Iyengar, S., Wells, R., & Schwartz, B. (2006). Doing better but feeling worse: looking for the “best” job undermines satisfaction. Psychological Science, 17, 143–150.CrossRefGoogle Scholar
  37. Jacoby, J. (1984). Perspectives on information overload. Journal of Consumer Research, 10, 432–435.CrossRefGoogle Scholar
  38. Johnson, E. J., & Goldstein, D. G. (2003). Do defaults save lives? Science, 302, 1338–1339.CrossRefGoogle Scholar
  39. Johnson, E. J., Hershey, J., Meszaros, J., & Kunreuther, H. (1993). Framing, probability distortions, and insurance decisions. Journal of Risk and Uncertainty, 7, 35–53.CrossRefGoogle Scholar
  40. Johnson, E. J., Bellman, S., & Lohse, G. L. (2002). Defaults, framing, and privacy: why opting in is not equal to opting out. Marketing Letters, 13, 5–15.CrossRefGoogle Scholar
  41. Just, D. R., & Wansink, B. (2009). Better school meals on a budget: using behavioral economics and food psychology to improve meal selection. Choices, 24, 1–6.Google Scholar
  42. Just, D. R., & Wansink, B. (2011). The flat-rate pricing paradox: conflicting effects of ‘all-you-can-eat’ buffet pricing. The Review of Economics and Statistics, 93, 193–200.CrossRefGoogle Scholar
  43. Kahneman, D., & Lovallo, D. (1993). Timid choices and bold forecasts: a cognitive perspective on risk taking. Management Science, 39, 17–31.CrossRefGoogle Scholar
  44. Kahneman, D., Krueger, A., Schkade, D., Schwarz, N., & Stone, A. (2006). Would you be happier if you were richer? A focusing illusion. Science, 312, 1908–1910.CrossRefGoogle Scholar
  45. Keeney, R. L. (1996). Value-focused thinking: identifying decision opportunities and creating alternatives. European Journal of Operational Research, 92, 537–549.CrossRefGoogle Scholar
  46. Kling, J. R., Mullainathan, S., Shafir, E., Vermeulen, L., & Wrobel, M. V. (2011). Misprediction in choosing Medicare drug plans. Harvard University Press, Cambridge.Google Scholar
  47. Koehler, D. J. (1991). Explanation, imagination, and confidence in judgment. Psychological Bulletin, 110, 499–519.CrossRefGoogle Scholar
  48. Langer, T., & Fox, C. R. (2005). Bias in allocation among risk and uncertainty: partition-dependence, unit dependence, and procedure dependence. University of Muenster. Working paper.Google Scholar
  49. Larrick, R. P., & Soll, J. B. (2008). The MPG illusion. Science, 320, 1593–1594.CrossRefGoogle Scholar
  50. Levav, J., Heitmann, M., Herrmann, A., & Iyengar, S. (2010). Order in product customization decisions: evidence from field experiments. Journal of Political Economy, 118, 274–299.CrossRefGoogle Scholar
  51. Loewenstein, G. F., & Elster, J. (1992). Choice over time. New York: Sage.Google Scholar
  52. Loewenstein, G. F., & Prelec, D. (1993). Preferences for sequences of outcomes. Psychological Review, 100, 91–108.CrossRefGoogle Scholar
  53. Loewenstein, G. F., & Schkade, D. (1999). Wouldn’t it be nice? Predicting future feelings. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-being: the foundations of hedonic psychology (pp. 85–105). New York: Sage.Google Scholar
  54. Lynch, J. G., & Ariely, D. (2000). Wine online: search costs affect competition on price, quality, and distribution. Marketing Science, 19, 83–103.CrossRefGoogle Scholar
  55. Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: inertia in 401(k) participation and savings behavior. Quarterly Journal of Economics, 116, 1149–1187.CrossRefGoogle Scholar
  56. Mandel, N., & Johnson, E. J. (2002). When Web pages influence choice: effects of visual primes on experts and novices. Journal of Consumer Research, 29, 235–245.CrossRefGoogle Scholar
  57. Martin, J. M., & Norton, M. I. (2009). Shaping online consumer choice by partitioning the web. Psychology and Marketing, 26, 908–926.CrossRefGoogle Scholar
  58. Messick, D. M. (1993). Equality as a decision heuristic. In J. Baron & B. A. Mellers (Eds.), Psychological perspectives on justice. Theory and applications (pp. 11–31). New York: Cambridge University Press.CrossRefGoogle Scholar
  59. Milch, K. F., Appelt, K. C., Weber, E. U., Handgraaf, M. J. J., & Krantz, D. H. (2009). From individual preference construction to group decisions: framing effects and group processes. Organizational Behavior and Human Decision Processes, 108, 242–255.CrossRefGoogle Scholar
  60. Mowrer, O. H. (1960). Learning theory and behavior. Hoboken: Wiley.CrossRefGoogle Scholar
  61. Murray, K. B., Liang, J., & Häubl, G. (2010). ACT 2.0: the next generation of assistive consumer technology research. Internet Research, 20, 232–254.Google Scholar
  62. Mytton, O., Gray, A., Rayner, M., & Rutter, H. (2007). Could targeted food taxes improve health? Journal of Epidemiology and Community Health, 61, 689–694.CrossRefGoogle Scholar
  63. Nickerson, R. S. (1999). How we know—and sometimes misjudge—what others know: imputing one's own knowledge to others. Psychological Bulletin, 125, 737–759.CrossRefGoogle Scholar
  64. Nickerson, R. S. (2001). The projective way of knowing: a useful heuristic that sometimes misleads. Current Directions in Psychological Science, 10, 168–172.CrossRefGoogle Scholar
  65. Nisbett, R. E., & Kanouse, D. E. (1968). Obesity, hunger, and supermarket shopping behavior. Proceedings of the American Psychological Association Annual Convention, 3, 683–684.Google Scholar
  66. O’Donoghue, T., & Rabin, M. (1999). Procrastination in preparing for retirement. In A. Henry (Ed.), Behavioral dimensions of retirement economics (pp. 125–156). Washington D.C.: Brookings Institution.Google Scholar
  67. Payne, J. W. (1975). Task complexity and contingent processing in decision making: an information search and protocol analysis. Organizational Behavior and Human Performance, 16, 366–387.CrossRefGoogle Scholar
  68. Payne, J. W., Bettman, J. R., & Johnson, E. J. (1993). The adaptive decision maker. Cambridge: Cambridge University Press.Google Scholar
  69. Payne, J. W., Sagara, N., Shu, S. B., Appelt, K. C., & Johnson, E. J. (2012). “Life expectation as a constructed belief: evidence of a live-to or die-by framing effect.” Working paper, Columbia University.Google Scholar
  70. Peters, E., Västfjäll, D., Slovic, P., Mertz, C. K., Mazzocco, K., & Dickert, S. (2006). Numeracy and decision making. Psychological Science, 17, 407–413.CrossRefGoogle Scholar
  71. Peters, E., Hibbard, J., Slovic, P., & Dieckmann, N. F. (2007). Numeracy skill and the communication, comprehension, and use of risk and benefit information. Health Affairs, 26, 741–748.CrossRefGoogle Scholar
  72. Peters, E., Dieckmann, N. F., Västfjäll, D., Mertz, C. K., Slovic, P., & Hibbard, J. (2009). Bringing meaning to numbers: the impact of evaluative categories on decisions. Journal of Experimental Psychology. Applied, 15, 213–227.CrossRefGoogle Scholar
  73. Price, B., Greiner, R., Häubl, G., & Flatt, A. (2006). Automatic construction of personalized customer interfaces. Proceedings of the 11th International Conference on Intelligent User Interfaces (IUI-06).Google Scholar
  74. Read, D., & Loewenstein, G. (1995). Diversification bias: explaining the discrepancy in variety seeking between combined and separated choices. Journal of Experimental Psychology. Applied, 1, 34–49.CrossRefGoogle Scholar
  75. Reed, A., Mikels, J. A., & Simon, K. I. (2008). Older adults prefer less choice than young adults. Psychology and Aging, 23, 671–675.CrossRefGoogle Scholar
  76. Rosenfield, D. B., Shapiro, R. D., & Butler, D. A. (1983). Optimal strategies for selling an asset. Management Science, 29, 1051–1061.CrossRefGoogle Scholar
  77. Sagara, N. (2009). Consumer understanding and use of numeric information in product claims. (Doctoral dissertation). University of Oregon. Retrieved from ProQuest. (Publication No. AAT 3395194)Google Scholar
  78. Scheibehenne, B., Greifeneder, R., & Todd, P. M. (2010). Can there ever be too many options? A meta-analytic review of choice overload. Journal of Consumer Research, 37, 409–425.CrossRefGoogle Scholar
  79. Schkade, D., & Kahneman, D. (1998). Does living in California make people happy? A focusing illusion in judgments of life satisfaction. Psychological Science, 9, 340–346.CrossRefGoogle Scholar
  80. Schwartz, B. (2004). The paradox of choice: why more is less. New York: Harper.Google Scholar
  81. Schwartz, N. D. (2010). Bank of America reports $7.3 billion loss, citing charges. The New York Times. http://www.nytimes.com/2010/10/20/business/20bank.html.
  82. Shu, S. B. (2008). Future-biased search: the quest for the ideal. Journal of Behavioral Decision Making, 21, 352–377.CrossRefGoogle Scholar
  83. Shu, S. B., & Gneezy, A. (2010). Procrastination of enjoyable experiences. Journal of Marketing Research, 47, 933–944.CrossRefGoogle Scholar
  84. Simonson, I. (1990). The effect of purchase quantity and timing on variety-seeking behavior. Journal of Marketing Research, 27(2), 150–162.CrossRefGoogle Scholar
  85. Smith, N. C., Goldstein, D. G, & Johnson, E. J. (2010). Choice without awareness: ethical and policy implications of defaults. Working paper.Google Scholar
  86. Soll, J. B., Keeney, R. L., & Larrick, R. P. (2011). Consumer misunderstanding of credit card use, payments, and debt: causes and solutions. Working paper.Google Scholar
  87. Soman, D., Ainslie, G., Frederick, S., Li, X., Lynch, J., Moreau, P., et al. (2005). The psychology of intertemporal discounting: why are distant events valued differently than proximal ones? Marketing Letters, 16, 347–360.CrossRefGoogle Scholar
  88. Streitz, N., Kameas, A., & Mavrommati, I. (2007). The disappearing computer: interaction design, system infrastructures and applications for smart environments. Heidelberg: Springer.Google Scholar
  89. Sunstein, C. R., & Thaler, R. H. (2003). Libertarian paternalism is not an oxymoron. The University of Chicago Law Review, 70, 1159–1202.CrossRefGoogle Scholar
  90. Thaler, R. H., & Sunstein, C. R. (2008). Nudge: improving decisions about health, wealth and happiness. New Haven: Yale University Press.Google Scholar
  91. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453–458.CrossRefGoogle Scholar
  92. Wansink, B. (2010). From mindless eating to mindlessly eating better. Physiology and Behavior, 100, 454–463.CrossRefGoogle Scholar
  93. Wansink, B. (2012) Package size, portion size, serving size… market size: the unconventional case for half-size servings. Marketing Science, 31, 54–57.Google Scholar
  94. Wansink, B., & Sobal, J. (2007). Mindless eating: the 200 daily food decisions we overlook. Environment and Behavior, 39, 106–123.CrossRefGoogle Scholar
  95. Wansink, B., Just, D. R., & Payne, C. R. (2009). Mindless eating and healthy heuristics for the irrational. American Economic Review, 99, 165–169.CrossRefGoogle Scholar
  96. Wansink, B., Soman, D., Herbst, K. C., & Payne, C. R. (2012). Partitioned shopping carts: assortment allocation cues that increase fruit and vegetable purchases. Cornell University. Working paper.Google Scholar
  97. Weber, E. U. (1997). Perception and expectation of climate change: precondition for economic and technological adaptation. In: M. Bazerman, D. Messick, A. Tenbrunsel, K. Wade-Benzoni (Ed.), Psychological perspectives to environmental and ethical issues in management (pp. 314–341). Jossey-Bass, San Francisco.Google Scholar
  98. Weber, E. U. (2006). Experience-based and description-based perceptions of long-term risk: why global warming does not scare us (yet). Climatic Change, 70, 103–120.CrossRefGoogle Scholar
  99. Weber, E. U. (2012). Doing the right thing willingly: behavioral decision theory and environmental policy. In E. Shafir (Ed.), The behavioral foundations of policy. Princeton University Press, Princeton.Google Scholar
  100. Weber, E. U., & Lindemann, P. G. (2007). From intuition to analysis: making decisions with our head, our heart, or by the book. In H. Plessner, C. Betsch, & T. Betsch (Eds.), Intuition in judgment and decision making (pp. 191–208). Mahwah: Erlbaum.Google Scholar
  101. Weber, M., Eisenführ, F., & von Winterfeldt, D. (1988). The effect of splitting attributes in multiattribute utility measurement. Management Science, 34, 431–445.CrossRefGoogle Scholar
  102. Weber, E. U., Johnson, E. J., Milch, K., Chang, H., Brodscholl, J., & Goldstein, D. (2007). Asymmetric discounting in intertemporal choice: a query theory account. Psychological Science, 18, 516–523.CrossRefGoogle Scholar
  103. Weitzman, M. (1979). Optimal search for the best alternative. Econometrica, 47, 641–654.CrossRefGoogle Scholar
  104. Xiao, B., & Benbasat, I. (2007). E-Commerce product recommendation agents: use, characteristics, and impact. MIS Quarterly, 31, 137–209.Google Scholar
  105. Zauberman, G., & Lynch, J. G. (2005). Resource slack and propensity to discount delayed investments of time versus money. Journal of Experimental Psychology. General, 134, 23–37.CrossRefGoogle Scholar
  106. Zwick, R., Rapoport, A., King, A., Lo, C., & Muthukrishnan, A. V. (2003). Consumer search: not enough or too much? Marketing Science, 22, 503–519.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Eric J. Johnson
    • 1
  • Suzanne B. Shu
    • 2
  • Benedict G. C. Dellaert
    • 3
  • Craig Fox
    • 2
  • Daniel G. Goldstein
    • 4
  • Gerald Häubl
    • 5
  • Richard P. Larrick
    • 6
  • John W. Payne
    • 6
  • Ellen Peters
    • 7
  • David Schkade
    • 8
  • Brian Wansink
    • 9
  • Elke U. Weber
    • 1
  1. 1.Center for Decision Science, Columbia Business SchoolColumbia UniversityNew YorkUSA
  2. 2.Anderson School of ManagementUCLALos AngelesUSA
  3. 3.Department of Business Economics, Erasmus School of EconomicsErasmus UniversityRotterdamNetherlands
  4. 4.Yahoo! Research and London Business SchoolLondonUK
  5. 5.School of BusinessUniversity of AlbertaEdmontonCanada
  6. 6.The Fuqua School of BusinessDuke UniversityDurhamUSA
  7. 7.Psychology DepartmentThe Ohio State UniversityColumbusUSA
  8. 8.Rady School of ManagementUCSDSan DiegoUSA
  9. 9.Applied Economics and Management DepartmentCornell UniversityIthacaUSA

Personalised recommendations