Choice architecture makes its way into anti-trust: Google Ruling

Rita McGrath
8 min readAug 7, 2024

The theory of monopoly has to date been firmly rooted in the analog world. Traditionally, a monopoly occurred when there was a single seller or producer and no close substitutes. With the Justice Department’s ruling that Google operates a monopoly in search, we’re in a whole new realm — one in which cognitive biases are now recognized by law.

Biased decision-making and choice architecture

As I’ve written about before, important discoveries in the behavioral sciences have shown for years that human decision-making bears little resemblance to the super-rational calculations beloved by economic theory. Economic theory posits that we should always make decisions that maximize our own utility, whatever that may be. But we don’t. Humans are subject to a vast number of cognitive biases, many that we are not even aware of.

There’s a biological reason for this — the world is messy and complex. It’s hard for our brains to sift through the information we are barraged with every second. It takes a lot of effort — and when it comes to brain effort, that means energy and calories. According to one study, the brain consumes around 20% of all our metabolic energy. Further, directing that energy to something that is our focus means that other information is going to be…

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Rita McGrath
Rita McGrath

Written by Rita McGrath

Columbia Business School Professor. Thinkers50 top 10 & #1 in strategy. Bestselling author of The End of Competitive Advantage & Seeing Around Corners.

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