behavioural

• bounded rationality - the idea that people make decisions based on limited information and are not always rational
• bounded self control - even when people want to make utilitarian decisions and are aware of how to do so they may be held back by a lack of self control
• heuristics - mental shortcuts that help us make decisions quickly and efficiently
• default bias - people prefer to carry on behaving as they have done meaning that they will repeat choices as this requires less cognitive effort
• choice architecture - presentation of choices to consumers that nudge them into making a specific decision
• herd behaviour - people will follow the decisions of others around them
• social norms - people may only do things because they are accepted as correct by the majority of the community
• anchoring - the use of other choices to nudge one into picking a desired one
• priming - the process of subconsciously influencing peoples behaviour to make it more likely that they make a certain decision
• framing - the process of presenting information in a way that influences the way it is perceived
• asymmetric framing - involves including an obviously inferior or overly expensive third option rather than one cheap and one expensive option to nudge consumers into purchasing the more expensive middle option
• availability heuristic - happens when people judge the likelihood of an event based on how easy it is to retrieve information about it
• scarcity heuristic - a mental shortcut whereby people place value on an item based on how easily it may be lost - e.g. limited time deals
• commitment bias - the deeper into a commitment one is the less likely one is to turn back
• behavioural economic may encourage government policy to become too paternalistic
• there are limits to nudge theory's efficacy, especially on certain consumers, so it may be better to use traditional policy to solve more serious issues