Decisions Affecting Choices: Current State and Future Directions for Applied Choice Architecture Research in Economics

Abstract

Choice architecture (CA) is the design of decision-making environments. Experimental studies of CA interventions like nudges have been used to inform public policymaking. However, the generalizability of such experiments has been challenged frequently, and the welfare implications of paternalistic interventions like nudges are not self-evident. I conduct a systematic literature review of 52 publications from the Scopus and Web of Science databases to evaluate extant applied CA research in economics from an experimental design perspective and suggest future directions enabling more robust and welfare-enhancing policymaking. I reveal a notable absence of discussions pertaining to both internal and external validity and a predominant reliance on Western participants. Key recommendations include pivoting toward Pareto improving “signpost” interventions and increasing the focus on economic significance. I contribute to the literature by novelly adopting an experimental design viewpoint and broadening the review scope beyond nudges to provide deeper insights into the associated welfare implications.