Prof Richard Thaler from Booth school of business gave a very good lecture on why study of consumer behavior is important to understand economics. He further explained how feedback and choice architecture streamlines what consumers choose. Some of his examples, such as a thermostat that tells you how much more it is going to cost per degree change in temperature or a glowing bulb that tells you how much energy you are using, are intriguing. I also liked the idea of credit card machines. I think these examples provoke thoughts around general problems around us and economically viable solutions for them.
The basic idea is to understand the best interest of consumers and markets together and develop policies (choice architecture) around it. Consider the choice of donating organs example. If you provide a choice to the survivors of a person, they are likely to override the default option beating the whole purpose of default (of having more donations). Making a decision clear at some point (at the time of issuing drivers license for organ donation example) helps.
I was not very convinced with the solutions provided for dealing with compliance with medication. Even though non-adherence to some treatment schedules could be impacting all of us (like antibiotic or TB treatments), I don't think a lottery or false alert alone are the solutions. I think a pill box that can learn patient's behavior and present a combination of these (i.e. false alert, incentive or just a reminder) could be one expensive solution. Another way could be that the doctor enforce a choice when patient is diagnosed i.e. a box with particular attribute is given to the patient based on doctor's perception of the patient behavior. I think making doctor a choice architect may work.
Read the full story here: http://edge.org/3rd_culture/thaler_sendhil08/class1.html
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