Choice architecture is the way options are set out in front of people. The same choice, set out differently, gets a different answer. The guide names three designs.
Three choice architectures
| Design | What it means | Example |
|---|---|---|
| Default choice | What happens if you do nothing. Most people stay with it. | New staff join the pension scheme unless they opt out. |
| Restricted choice | Fewer options are offered, so choosing is easier. | A pension plan offers 5 funds, not 200. |
| Mandated choice | You must make a choice before you can go on. | You must say yes or no to organ donation to renew your licence. |
Remember it as: Default: do nothing and you are in. Restricted: fewer options. Mandated: you must choose.
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A nudge steers behaviour without banning anything and without money: no tax, no fine, no subsidy. It works with how people really decide.
Nudges you have met
Change the default
Opt-out organ donation: far more people end up registered.
Put it where you look
Fruit at the till and water at eye level in a school canteen.
Show what others do
"9 out of 10 people in your street pay their tax on time."
Make it stand out
Calorie counts printed next to each item on the menu.
The points to remember
- Consumer nudge: an action that influences behaviour without restricting choice or giving a financial incentive.
- It works through psychology: defaults, placement, social norms, framing.
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Governments can change a choice in three ways. A nudge is the gentlest.
Nudge or a traditional policy?
| Tool | How it works | Strength | Weakness |
|---|---|---|---|
| Tax or subsidy | Changes the price of the choice | Strong, predictable effect | Costs money or hits the poor hardest |
| Law or ban | Removes the choice | Certain result | Takes away freedom; costly to enforce |
| Nudge | Changes how the choice is set out | Cheap; everyone stays free to choose | Small effects; who decides what is "good"? |
When to recommend one: Nudges work best when people already want the better choice but do not make it, such as saving or exercising. They work badly against strong habits or addiction.
Paper 3 asked this in November 2024, for 10 marks, and a similar one on exercise in May 2025. A nudge counts as a policy, and so does a tax, a subsidy or a law.
In a country, a train ticket between its two largest cities costs €80, while the same trip by plane costs €45. Only one traveller in five goes by train.
Using this information and your knowledge of economics, recommend a policy that the government could introduce to increase travel by train.
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How the 10 marks are given
| Marks | What your answer needs |
|---|---|
| 9–10 | Theory used effectively, figures from the data support the analysis, balanced evaluation |
| 7–8 | Policy fully explained with theory, figures from the data applied, evaluation mostly balanced |
| 5–6 | Policy explained, some figures from the data, evaluation one-sided |
| 3–4 | A suitable policy, little theory, no figures from the data |
| 1–2 | A policy named, little more |