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  • Print publication year: 2020
  • Online publication date: July 2020

42 - Economic and Behavioral Economic Approaches to Behavior Change

from Part III - Behavior Change Interventions: Practical Guides to Behavior Change


This chapter provides an overview of economic and behavioral economic approaches to behavior change. The chapter begins with a description of the traditional or neoclassical economic view of decision-making using expected utility theory as its basis. Attempts by an external party (e.g., a government or agency) to change behavior are viewed as justifiable in a limited number of circumstances, such as when there are externalities or coordination failures. When behavior change is warranted, neoclassical economics has focused on four options: provide information, increase incentives, reduce prices, or increase subsidies, or impose regulations. To be successful, the approach must change the net benefits of the promoted behavior. The chapter then describes the rationale behind behavioral economic approaches to behavior change, emphasizing the role that “nudges” play in behavior change. Examples are provided of common heuristics and associated decision errors that can result, and how nudges are designed to overcome these decision errors. The underlying rationale and steps for developing nudges are summarized. Current evidence suggests that some nudges can be effective in changing behavior, but more research is needed to demonstrate the effectiveness of many nudge strategies. The chapter concludes with a discussion of the likely long-term impact of nudges in the field of behavior change.

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