Consumer Nudges (HL Only)
Role of Government in Microeconomics
AO2·AO4·HL
Syllabus requirement
Behavioral tools used to influence choices without restricting options (e.g. layout changes, default options).
Assessment objectives
AO2 Application and AnalysisAO4 Use of Appropriate Skills
Higher LevelThis topic is assessed at HL.
Summary
This topic explains consumer nudges as a form of government intervention that subtly changes choice architecture to influence behaviour without removing freedom of choice. It situates nudges within the wider role of government in correcting market failures and describes how interventions (price controls, taxes, subsidies, direct provision) can affect markets and stakeholders, while also creating potential government failure and unintended consequences.
