Christian Helmers, Pramila Krishnan, Manasa Patnam, 25 January 2016

The growth of e-commerce has seen an enormous increase in the choice of products available online. With recent evidence from psychology suggesting that too much choice can impede decision making, this column examines whether consumers’ online choices are consistent with models of limited attention. High-frequency, transaction-level data from an online retail store reveal that consumers are influenced by recommendations. This suggests consumers do indeed have limited attention and simplify decision making by focusing on a subset of available products.

Christian Schubert, 22 January 2016

Nudges are modifications of people’s choice architecture that impact their behaviour but don’t change their incentives or coerce them. As a policy instrument, nudges have been shown to be effective in changing certain kinds of behaviours. This column explores the ethical issues that arise in employing such potentially manipulative policies. An evaluation programme is outlined that explores a potential policy’s impact on people’s wellbeing, autonomy, and integrity, along with its practical implications.

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