One of the examples given at the IPA's recent Behavioral Economics workshops really stood out for me as an explanation of what "choice architecture" is all about. It's an experiment by Dan Ariely, who's a behavioural economics professor.

People were given the following options for subscription to The Economist:
1. Economist.com for $59
2. Print edition for $125
3. Both economist.com and the print edition for $125

16% chose 1.
0% unsurprisingly chose 2.
84% chose option 3.

The interesting finding comes from a second experiment that only gave people options 1 and 3, removing the redundant option. In this situation 68% chose option 1 with 32% chosing option 3; the reverse of what happended in the first experiment. So although it is a useless option itself, including the print only option clearly influences people's perception of the choices available, making option 3 look excellent value for money. This highlights the fallability of our judgement systems; purely rational, perfect-calculation humans would have made the same choice in both instances.

This video from TED is Dan Ariely presenting an introduction to the topic, including some rather disturbing results from experiments with physicians.

His closing words are particularly poignant. That we design things well for our physical limitations (stairs etc.) but we're poor at recognising and thus designing for our cognitive limitations. By taking our cognitive deficiencies into account we could design for a better world.