Give People Choices, Not Edicts

Thursday, December 5, 2013

“Nudges” include disclosure policies, as in the idea that borrowers should “know before they owe.” They include simplification, as in recent reductions in the paperwork requirements for the Free Application for Federal Student Aid.

Nudges include default rules, which establish what happens if people do nothing at all — as with automatic enrollment in a savings plan. They also include reminders, such as text messages informing people they are about to go over their monthly allowance of mobile-phone minutes.

Source: Bloomberg News (link opens in a new window)

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behavioral economics, financial products, governance