Salience, chains and anchoring Reducing complexity and enhancing the practicality of behavioural economics

Abstract

One problem facing “nudge units” is the lack in behavioural economics of a core unifying model of the mind and behaviour. Portable Extensions of Existing Models (Rabin, 2013a; 2013b) make it difficult to approach the problem of structuring choice architecture to “nudge” people (Thaler and Sunstein, 2008) into behavioural change in an integrated, holistic and systematic manner. The purpose of this essay is to advance a new proposal which might address this problem and make behavioural economics more “intellectually competitive” (Harstad and Selten, 2013) and its use more practical. We make use of a new theory of the mind as a network structure within which the psychological process operates. Within this structure we identify three properties –salience, chains and anchoring– by which behavioural change is brought about. This has both intellectual and practical value for policymakers by reducing the complexity of behavioural economics and making it more easily applied.