The Forms and Limits of Choice Architecture as a Tool of Government

• Published date: 01 July 2016
• DOI: http://doi.org/10.1111/lapo.12057
• Date: 01 July 2016

The Forms and Limits of Choice Architecture

as a Tool of Government

KAREN YEUNG

Although the use of design-based control techniques, broadly understood as the purposeful

shaping of the environment and the things and beings within it toward particular ends, have been

used throughout human history, until the publication of Thaler and Sunstein’s Nudge, they have

remained relatively neglected as a focus of regulatory scholarship. Nudge can be understood as a

design-based regulatory technique because it provides the means by which a choice architect

intentionally seeks to influence another’s behavior through the conscious design of the choice

environment. But there are other forms of choice architecture besides nudge. The gunman who

offers his victim “your money or your life?” is as much a choice architect as the cafeteria

manager who places the fruit at eye level while placing the chocolate cake further back to

encourage patrons to make healthier dietary choices and the supermarket owner who slashes

grocery prices on their use by date to stimulate sales. This article focuses on three forms of

choice architecture—coercion, inducements, and nudge—employed by the state in order to

influence the behavior of others. It seeks to evaluate whether each form of choice architecture

coheres with the fundamental values and premises upon which liberal democratic states rest and

can therefore be properly characterized as libertarian. Chief among these values is the

importance of individual liberty and freedom and the concomitant special status accorded to

individual choice in liberal democratic communities. In so doing, it highlights different ways in

which these techniques may be regarded as an interference with individual freedom, and the

conditions under which such interferences might be rendered acceptable or otherwise justified.

INTRODUCTION

Design has long been used to influence human behavior. Yet design-based control techni-

ques, broadly understood as the purposeful shaping of the environment and the things

and beings within it toward particular ends (Yeung 2015), have until the publication of

Thaler and Sunstein’s highly readable paperback Nudge (2008), remained neglected as a

focus of regulatory scholarship (cf., Yeung 2008). Nudge popularized findings from labo-

ratory experiments by cognitive psychologists that highlight considerable divergence

between the rational actor model of decision making assumed in microeconomic analysis

and how individuals actually make decisions due to their pervasive use of cognitive short-

cuts and other decision-making heuristics. The implications of these experiments can, as

Nudge emphasizes, be readily harnessed by those with a stake in influencing the behavior

of others through the use of choice architecture often in simple, inexpensive, yet highly

effective ways. For example, the mere rearrangement of items on a menu of options can

I am grateful to John Coggan, Shanmugapriya Umachandran, and two anonymous referees for comments on

earlier drafts. All errors remain my own.

Address correspondence to: Karen Yeung, The Dickson Poon School of Law, King’s College London, The

Strand London, London, WC2R 2LS, United Kingdom. Telephone: 144 (0)20 7848 2479; E-mail: Karen.

yeung@kcl.ac.uk.

LAW & POLICY, Vol. 38, No. 3, July 2016 ISSN 0265–8240

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C2016 The University of Denver/Colorado Seminary

doi: 10.1111/lapo.12057

systematically influence individual decision making. Thus, restaurant owners wishing to

sell more of their most profitable dishes could list them at the beginning or end of the

menu, given that items so placed are twice as popular compared with their popularity

when the same items are placed at the center of the menu (Dayan and Bar-Hillel 2011). To

increase the average price of the bottles of wine sold, restaurant owners can add a few

more expensive bottles to the wine list: because people take cues from the list as to how

much they should expect to pay for a bottle of wine, many patrons will buy a wine priced

just below the most expensive on the list because they do not wish to be extravagant while

not wishing to be seen as cheap (Metrix 2014). But it is not private dining establishments

that Thaler and Sunstein primarily seek to address, although commercial firms could uti-

lize nudge

1

and other forms of choice architecture to enhance sales. Rather, their exhorta-

tions are targeted primarily at public policy makers, urging them to employ nudge

techniques to improve peoples’ decisions about “health, wealth and happiness” (Thaler

and Sunstein 2008, 14-15).

Underlying Thaler and Sunstein’s proposals is a simple yet important insight: that

choice architecture is ubiquitous and unavoidable. But does it follow, as Thaler and Sun-

stein suggest, that policy makers can utilize choice architecture as they see fit? If choice

architecture is as benign and potentially welfare enhancing as a cursory read of Nudge

might suggest, then one might allow the state a free reign in utilizing choice architecture

to implement its policy goals. But there are other forms of choice architecture besides

nudge. The gunman who offers his victim “your money or your life?” is as much a choice

architect as the cafeteria manager who places the fruit at eye level while placing the choco-

late cake further back to encourage patrons to make healthier dietary choices and the

supermarket owner who slashes grocery prices on their use by date to stimulate sales. This

article focuses on the following three forms of choice architecture that may be employed

by the state in order to influence the behavior of others:

•Coercion: a technique in which the choice architect (D) seeks to compel another (V) to

perform a particular action by bringing about, or threatening to bring about, some

unwelcome consequence if V does not perform that action;

•Inducements: a technique through which the choice architect (D) seeks to encourage

another (V) to engage in a desired action, by offering to provide some kind of bene-

fit to V if she engages in that action; and

•Nudge: a technique through which the choice architect (D) seeks to encourage another

(V) to engage in a desired action by intentionally arranging the choice environment

to render it systematically more likely that V will take the action D desires while

allowing V to easily and cheaply avoid taking the action preferred by D.

One of my central concerns is to evaluate whether these forms of choice architecture

can be understood as libertarian: by this I mean that they cohere with the fundamental

values and premises upon which liberal democratic states rest (Waldron 1987). Chief

among these values is the importance of individual liberty and freedom and the concomi-

tant special status accorded to individual choice in liberal democratic communities (Scan-

lon 1988; Mill 1859). In so doing, I will highlight different ways in which these techniques

may be regarded as an interference with individual freedom, and the conditions under

which such interferences might be rendered acceptable or otherwise justified.

This article proceeds in four parts. First, I begin by critically interrogating Thaler and

Sunstein’s claim that because choice architecture is ubiquitous and inescapable, the state

can utilize choice architecture as it sees fit. Second, I analyze the underlying mechanisms

of each architectural form through the lens of the liberal commitment to liberty and

Yeung THE FORMS AND LIMITS OF CHOICE ARCHITECTURE 187

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