ABSTRACT

The application of government policy instruments can exert powerful influence on individuals' health-related behaviors. There are numerous circumstances where government uses laws, information, and regulation to affect individual behavior with goal of promoting healthy behaviors. This chapter discusses how application of insights from behavioral economics can improve understanding of individual behavior and decision-making and, in turn, make policy effective. In the Stackelberg game of policy design, incorporating non-standard beliefs, decision-making, and preferences would improve the definition of individual reaction functions and enable the government as mover to maximize payoffs which, in case of government, are based on societal welfare. The UK Behavioural Insights Team, established, was the government institution focused on the application of behavioral sciences to public policy. Since then, the United States started the Social and Behavioral Sciences Team, based at the White House, with the similar goal of using behavioral science to make public programs and services more effective by improving participation and outcomes in these programs.