The Necessity of Paternalistic Choice Architects

One of my favorite experiments to think about is a fabled study about people and jam. In an experiment, people at a store were able to sample jam. In one situation, there were only a few jams to sample, and in the other situation there was a huge selection of jams. Shoppers could try them all before making a purchase. The natural expectation (at least for me) is to assume that those who get to try more jams will be more happy with their final selection. After all, they have more jams to try and are more likely to find a jam that best suited their taste preferences. The results, however, suggest that people who only had a few jams to sample more happy with their final jam choice than the people with a bunch of jams to try.

 

This experiment reveals something interesting about how our mind works. Unlimited freedom and choice means that we are never truly satisfied with the decisions we make. We will always have a lingering doubt, and we will live with the regret of possibly making the wrong choice. The more options we have, the more likely we will feel as though we may have made the wrong decision. We might feel compelled to go beyond the standard default choice, selecting against a strawberry to go with huckleberry, even though we know we would have been perfectly content getting our regular strawberry jam.

 

The results of the jam experiment have important implications for choice architects. A choice architect is anyone who is in a position to organize, design, shape, administer, or deliver a choice to another person. Parents are choice architects when they give their children different options for toys, sports, or how to generally spend their time and attention. Your human resources benefits manager is a choice architect when they determine which health care plan types will be offered to employees. Very few of our decisions are truly free from a choice architect of one sort.

 

These choice architects have important decisions to make. In the book Nudge, authors Cass Sunstein and Richard Thaler make an argument for libertarian paternalism, the idea that choice architects can nudge people into making the decisions that will be best for them. They write, “The paternalistic aspect lies in the claim that it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better.” It can seem naïve and elitist to believe that  one person can make such decisions for another person, but in reality, it is imperative that people believe and act as if it is possible, and the jam experience helps show why this is necessary.

 

None of us know exactly how much each person needs to save for retirement, which health insurance plan will truly be the best possible plan for ourselves or someone else, or which jam is really going to be the one for someone else. But we can generally identify the right direction in each choice for most people. We know people typically don’t save as much for retirement as they should, so defaulting them into a retirement savings plan at 8% is better than defaulting them into no retirement savings plan or a plan that sets aside 3% of their paycheck. Young and healthy people may not believe they need health insurance, but we can auto enroll them into a standard high deductible plan if they don’t actively make a choice for themselves, ensuring they have some type of coverage in the case of a car crash or ski accident. We know most people eat jam with toast or maybe on pancakes, so most people probably aren’t that interested in purchasing a jalapeno jam during their typical weekend grocery store trip. The strawberry can stay at eye level while the jalapeno jam can stay on the top shelf and maybe get a temporary end-cap spot for the holidays.

 

The jam study also shows that people don’t want to be presented with too many options. They will have trouble making a choice and won’t be satisfied with their final decision. Narrowing the range of choices can help people better manage their decisions, and can help ensure they don’t select a plan that is wildly off course for their best interest. This is a basic first step for a choice architect, and reveals the value that choice architects can provide with only a minimal level of paternalistic interference. Choice architects can take things a step further, as Sunstein and Thaler encourage throughout Nudge, but taking a step backward, eliminating the paternalism in choice architecture, doesn’t encourage flourishing by maximizing freedom of choice, it creates paralysis, doubt, and too many options for a person to reasonably consider, especially when dealing with topics more complex than jam.

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