ABSTRACT
This chapter looks at the whether behavioral economics can be used by policy-makers to help people make better choices. It illustrates the importance of institutions, this will take us into the world of practical policy design and intervention. The chapter shows that institutions can be of two basic kinds: formal institutions, such as markets, and informal institutions, such as social norms. In recent years there has been much excitement that behavioral economics can change the way in which policy is viewed when it comes to individual incentives. The opens up interesting new ways to think of economics and policy, informed by behavioral economics. The mindspace principles are designed to help policy-makers better understand how possible policies might change behavior; they are a kind of checklist of things to think about. The Institute for Government has come up with the idea of mindspace. In many instances, governments directly allocate portions of the spectrum to companies.
