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Everyone Believes in Choice

Christophe Carugati

12 Mar 2022

People love choice. Choice makes people happy because they decide what they want. Looking for a date? It takes less than a minute to create a Tinder account that opens the door to thousands of handsome people. Some compete with a dog picture, while others with a cat or even a dog filter on their head. Aware of the dilemma of choosing between cat, dog, and dog filter, Tinder helps select a list of potential dateable people thanks to personalized algorithms—what the two funniest economics, Thaler and Sunstein, call a nudge. Of course, the dredgers think they choose. Everyone believes in choice.

Choosing is caring. People want to choose. Even more, they want to make a simple and good choice. The way the architect business or government displays a choice plays a crucial role in what people choose—the two economics call it a choice architecture. The reason is that people are lazy in choosing. A good architect knows it and tries to make a frictionless choice experiment with a golden rule in mind: make it easy.

However, some architects are good at making it easy for their own interests to the detriment of the consumer’s interests. They try to steer users to make a choice they do not want, but that is valuable for them—a strange word from Thaler called a sludge, the dark side of nudge. The UK competition service recently showed that people encounter sludge every day online.

A silent example is cookies. Not the delicious cakes but the online version that requires people to consent to data collection freely. Some architects do not want people to decline to consent because they will make less revenue from advertising due to the inability to offer personalized advertising. So rather than make it easy, they make it hard. It is simple to accept but hard to decline. The accept button is salient in the middle, but the decline button is hidden in the corner or on a second page. Several academic studies show that this choice architecture reduces consumer choice and steers users to consent to data collection. The online cookies are less delicious than the cakes for consumers, not due to a bad law but to malicious choice architects.

The problem with sludge is that it makes choices harder, if not impossible, for ordinary people. It reduces choice, which makes competition and consumers worse off. If Tinder thinks that the dog filter is good for its own interest, it will opt for a choice architect that will hide people with a picture of a cat or a dog. They will not be able to compete with the one with a dog filter. Some people will dislike only seeing pictures of a dog filter because they want to match with a picture of a cat (actually, an academic study shows that men posting with a picture of a cat makes them less dateable, miouuuu).

A law might try to prohibit sludge, but human creativity is without limits. A choice architect will always find a way to sludge its consumers, voluntary or involuntary. However, it can mandate to make it easy. For instance, they can order to make it as easy to accept as to decline, clear information in a standardized form, and disclose all prices on the first page.

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