Table 1.
A Sample of Key Departures From Rationality and Their Related Behavioral Economics Applications
| Deviation from rationality | Possible behavioral economics application(s) |
|---|---|
| Time inconsistent preferences (e.g., hyperbolic discounting) People tend to prefer more immediate gratification, even at the expense of longer-run well-being. This may lead to preference reversals, such as people repeatedly quitting and then resuming risky health behaviors, and dietary cycles of binging and purging. | Offer pre-commitment devices that allow people to restrict the choices of their future selves in order to increase the probability of adhering to the healthy behavior. Research suggests that people are more successful in quitting smoking and losing weight when at the outset they post a monetary bond that would be forfeited in the future should they fail.7,9–11 |
| Bounded rationality Rationality in decision making is curtailed by a lack of information, cognitive limitations, and a finite amount of time to make a decision. People may also have finite amounts of willpower and experience decision fatigue. |
Simplify how information is presented in order to make it easy for people to use. Simple checklists for important multistep procedures may be useful in preventing surgical errors and airline crashes.12 |
| Status quo bias People exhibit inertia, and tend not to deviate from the default option or reverse their earlier decisions. For example, many people stick with default options for organ donation, retirement savings, and health insurance plans. |
Make the healthy option a default option, such as including sliced apples rather than french fries as a side in children’s meals.13 Limit portion sizes. |
| Framing effects People react to the same tradeoff in different ways depending on whether the possible outcomes are presented as losses or gains. Some people respond differently to risk presented as 80% chance of survival versus 20% chance of death. |
Uptake may be improved by using gains-framed messages and incentives for encouraging healthy behaviors and loss-framed messages for encouraging use of health screenings.14–18 |
| Availability heuristic People judge the odds of a given event occurring based on how readily an example comes to mind. Diseases or conditions faced by a friend or which are the topic news coverage and advertising tend to increase individual’s perception of their personal risk of the disease. |
Prime a behavior by providing examples relevant for that population. For example, youth may be more responsive to a drug prevention program after the death of a celebrity from drug overdose. |
| (Mis)perceptions of social norms People want to conform to social norms but often misperceive the norms/behaviors of others. For example, many college students overestimate how much alcohol their peers drink. |
Avoid conveying the message that large fractions of the population are engaged in risky health behaviors (especially to teenagers and others who may be easily influenced by bandwagon or peer effects). |