I present a brief overview of the paternalistic policies that are currently promoted, and then suggest that one broad area has been overlooked: individuals’ interest in behaving in a way that reflects their moral values. Paternalists want to promote individual welfare, generally construed subjectively: welfare is a function of that person’s own goals. Most paternalists have focused on relatively material goals, including good health and financial success. If we examine the idea of subjective welfare more closely we will see that we have other goals as well: most people have moral values, and moral values that are not purely egoistic. People make mistakes in the pursuit of their moral goals that are in some cases very similar to the mistakes they make in the pursuit of material welfare, and similar interventions are permissible.
{"title":"Moral Paternalism","authors":"Sarah Conly","doi":"10.1561/105.00000096","DOIUrl":"https://doi.org/10.1561/105.00000096","url":null,"abstract":"I present a brief overview of the paternalistic policies that are currently promoted, and then suggest that one broad area has been overlooked: individuals’ interest in behaving in a way that reflects their moral values. Paternalists want to promote individual welfare, generally construed subjectively: welfare is a function of that person’s own goals. Most paternalists have focused on relatively material goals, including good health and financial success. If we examine the idea of subjective welfare more closely we will see that we have other goals as well: most people have moral values, and moral values that are not purely egoistic. People make mistakes in the pursuit of their moral goals that are in some cases very similar to the mistakes they make in the pursuit of material welfare, and similar interventions are permissible.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000096","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46635430","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper offers a sustained critique of behavioral law and economics (BLE) on both a theoretical and practical level. The theoretical discussion fastens on the unwillingness of BLE take into account how the standard biological account of inclusive fitness helps explain key elements of human behavior in family and other nonmarket settings—an omission that it shares with much of traditional rational choice theory. The practical level disputes the central claims of libertarian paternalism. First, the theory is not libertarian—for at no point does it indicate areas where deregulation is appropriate, including the antidiscrimination laws in competitive labor markets. Second, its broad definition of paternalism is useless in all real world analysis. These omissions cause BLE to underestimate the extent to which market institutions can correct for various cognitive biases, leading it to systematically overstate the individual and social benefits deriving from either mandatory disclosures or mandatory contributions to both private and public pension plans and social security. The programs perform far worse than private pension plans regulated under classical principles of freedom of contract.
{"title":"The Dangerous Allure of Libertarian\u0000 Paternalism","authors":"R. Epstein","doi":"10.1561/105.00000087","DOIUrl":"https://doi.org/10.1561/105.00000087","url":null,"abstract":"This paper offers a sustained critique of behavioral law and economics (BLE) on both a theoretical and practical level. The theoretical discussion fastens on the unwillingness of BLE take into account how the standard biological account of inclusive fitness helps explain key elements of human behavior in family and other nonmarket settings—an omission that it shares with much of traditional rational choice theory. The practical level disputes the central claims of libertarian paternalism. First, the theory is not libertarian—for at no point does it indicate areas where deregulation is appropriate, including the antidiscrimination laws in competitive labor markets. Second, its broad definition of paternalism is useless in all real world analysis. These omissions cause BLE to underestimate the extent to which market institutions can correct for various cognitive biases, leading it to systematically overstate the individual and social benefits deriving from either mandatory disclosures or mandatory contributions to both private and public pension plans and social security. The programs perform far worse than private pension plans regulated under classical principles of freedom of contract.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000087","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43430486","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Behavioral economics began with the intention of eliminating the psychological blind spot in rational choice theory and ended up portraying psychology as the study of irrationality. In its portrayal, people have systematic cognitive biases that are not only as persistent as visual illusions but also costly in real life—meaning that governmental paternalism is called upon to steer people with the help of “nudges.†These biases have since attained the status of truisms. In contrast, I show that such a view of human nature is tainted by a “bias bias,†the tendency to spot biases even when there are none. This may occur by failing to notice when small sample statistics differ from large sample statistics, mistaking people’s random error for systematic error, or confusing intelligent inferences with logical errors. Unknown to most economists, much of psychological research reveals a different portrayal, where people appear to have largely fine-tuned intuitions about chance, frequency, and framing. A systematic review of the literature shows little evidence that the alleged biases are potentially costly in terms of less health, wealth, or happiness. Getting rid of the bias bias is a precondition for psychology to play a positive role in economics.
{"title":"The Bias Bias in Behavioral Economics","authors":"G. Gigerenzer","doi":"10.1561/105.00000092","DOIUrl":"https://doi.org/10.1561/105.00000092","url":null,"abstract":"Behavioral economics began with the intention of eliminating the psychological blind spot in rational choice theory and ended up portraying psychology as the study of irrationality. In its portrayal, people have systematic cognitive biases that are not only as persistent as visual illusions but also costly in real life—meaning that governmental paternalism is called upon to steer people with the help of “nudges.†These biases have since attained the status of truisms. In contrast, I show that such a view of human nature is tainted by a “bias bias,†the tendency to spot biases even when there are none. This may occur by failing to notice when small sample statistics differ from large sample statistics, mistaking people’s random error for systematic error, or confusing intelligent inferences with logical errors. Unknown to most economists, much of psychological research reveals a different portrayal, where people appear to have largely fine-tuned intuitions about chance, frequency, and framing. A systematic review of the literature shows little evidence that the alleged biases are potentially costly in terms of less health, wealth, or happiness. Getting rid of the bias bias is a precondition for psychology to play a positive role in economics.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000092","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43940090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The articles in this special issue of the Review of Behavioral Economics were originally presented at a conference at the New York University School of Law on April 13 and 14, 2018. The conference was sponsored by the Classical Liberal Institute at NYU Law which is directed by Richard A. Epstein and Mario J. Rizzo. We are especially thankful to our program manager, Laura Cresté, for her invaluable help in organizing this conference. The rise of behavioral economics over the past thirty years or so has opened up new areas of public policy. Previously, most economists defended government intervention in cases of monopoly power or other forms of restrictions on competition, activities where externalities were present, public goods, and cases of asymmetric or deficient information, as well as a ragbag of other cases that could be characterized as forms of “market failure.” Today behavioral economists emphasize the presence of more endemic forms of failure, that is, “decision-making failures.” Collectively, these refer to the failure of ordinary individuals and government decision-makers alike to follow the traditional neoclassical standards of rationality. These individuals, whether ordinary people, government officials, or private professionals, may be systematically biased in their cognition; or they may conduct their work under inconsistent preference structures. For example, it is commonly asserted by behavioral economists that two logically equivalent ways of framing a problem may elicit different choices. A doctor may say that an operation has a survival rate of 90% or a fatality rate of 10%. In the former case, more people may choose to have the operation than in the latter case. People may also overestimate small probabilities and under-estimate large probabilities. Similarly people’s preferences may be greatly affected by nudges, even though the nudge does not change the relative costs of or information regarding the different options. Behavioral economists point to the profound effects of automatic enrollment in employer-sponsored retirement savings programs, in contrast to programs for which only those individuals who chose to actively enroll participate.
{"title":"Introduction: Behavioral Economics\u0000 and New Paternalism","authors":"R. Epstein, M. Rizzo","doi":"10.1561/105.00000101","DOIUrl":"https://doi.org/10.1561/105.00000101","url":null,"abstract":"The articles in this special issue of the Review of Behavioral Economics were originally presented at a conference at the New York University School of Law on April 13 and 14, 2018. The conference was sponsored by the Classical Liberal Institute at NYU Law which is directed by Richard A. Epstein and Mario J. Rizzo. We are especially thankful to our program manager, Laura Cresté, for her invaluable help in organizing this conference. The rise of behavioral economics over the past thirty years or so has opened up new areas of public policy. Previously, most economists defended government intervention in cases of monopoly power or other forms of restrictions on competition, activities where externalities were present, public goods, and cases of asymmetric or deficient information, as well as a ragbag of other cases that could be characterized as forms of “market failure.” Today behavioral economists emphasize the presence of more endemic forms of failure, that is, “decision-making failures.” Collectively, these refer to the failure of ordinary individuals and government decision-makers alike to follow the traditional neoclassical standards of rationality. These individuals, whether ordinary people, government officials, or private professionals, may be systematically biased in their cognition; or they may conduct their work under inconsistent preference structures. For example, it is commonly asserted by behavioral economists that two logically equivalent ways of framing a problem may elicit different choices. A doctor may say that an operation has a survival rate of 90% or a fatality rate of 10%. In the former case, more people may choose to have the operation than in the latter case. People may also overestimate small probabilities and under-estimate large probabilities. Similarly people’s preferences may be greatly affected by nudges, even though the nudge does not change the relative costs of or information regarding the different options. Behavioral economists point to the profound effects of automatic enrollment in employer-sponsored retirement savings programs, in contrast to programs for which only those individuals who chose to actively enroll participate.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000101","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47481861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I explore the area of economic life at the border between paternalism and entrepreneurship, with reference to dual-self Planner/ Doer models used in behavioural economics. Using a concept of a ‘continuing person’ as the composition of her Doer selves at all points in time, I argue that competitive markets provide individuals with every opportunity for feasible voluntary exchanges that they collectively want to use. The mechanism that achieves this result is entrepreneurship. Entrepreneurs do not respond to the preferences that people hold as Planners; they try to anticipate the future preferences of Doers.
{"title":"Paternalism and Entrepreneurship","authors":"R. Sugden","doi":"10.1561/105.00000089","DOIUrl":"https://doi.org/10.1561/105.00000089","url":null,"abstract":"I explore the area of economic life at the border between paternalism and entrepreneurship, with reference to dual-self Planner/ Doer models used in behavioural economics. Using a concept of a ‘continuing person’ as the composition of her Doer selves at all points in time, I argue that competitive markets provide individuals with every opportunity for feasible voluntary exchanges that they collectively want to use. The mechanism that achieves this result is entrepreneurship. Entrepreneurs do not respond to the preferences that people hold as Planners; they try to anticipate the future preferences of Doers.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000089","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45181118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Outstanding U.S. consumer credit totalled $3.84 trillion, emphasizing the fact that helping consumers effectively manage their personal finances has never been more important. Among the three pillars of financial well-being, this paper addresses the last pillar related to behavioral facilitation, given that one of the biggest challenges most consumers face is their inability to convert their best intentions into actual behavior. Specifically, this paper reviews and discusses various behavioral interventions in choice architecture designed to facilitate healthy financial behavior. These include enhancing physical height to increase level of thinking and long-term focus, incorporating incidental cues to form virtual boundaries and evoke implementation mindset, and using verbal/visual presentation of multi-faceted financial goals to emphasize goal singularity and increase implementation. Findings across such studies contribute to recent research on financial decision-making and choice architecture, and they provide readily applicable strategies for policy makers to “nudge†consumers toward more responsible financial decisions.
{"title":"Choice Architecture in Consumer\u0000 Financial Decisions","authors":"Min Zhao","doi":"10.1561/105.00000088","DOIUrl":"https://doi.org/10.1561/105.00000088","url":null,"abstract":"Outstanding U.S. consumer credit totalled $3.84 trillion, emphasizing the fact that helping consumers effectively manage their personal finances has never been more important. Among the three pillars of financial well-being, this paper addresses the last pillar related to behavioral facilitation, given that one of the biggest challenges most consumers face is their inability to convert their best intentions into actual behavior. Specifically, this paper reviews and discusses various behavioral interventions in choice architecture designed to facilitate healthy financial behavior. These include enhancing physical height to increase level of thinking and long-term focus, incorporating incidental cues to form virtual boundaries and evoke implementation mindset, and using verbal/visual presentation of multi-faceted financial goals to emphasize goal singularity and increase implementation. Findings across such studies contribute to recent research on financial decision-making and choice architecture, and they provide readily applicable strategies for policy makers to “nudge†consumers toward more responsible financial decisions.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000088","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44948123","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The goal of making people better off “by their own standard†in the New Paternalism research program of Thaler-and-Sunsteininspired “nudging†raises a number of theoretical and practical risks. Some of these risks are straightforward. Others are subtle. I enumerate rarely acknowledged risks that nudging programs face based on informational loss, forgone individual payoffs, and social welfare losses. This essay draws on neoclassical information economics, social welfare theory, and the methodological literature on normative behavioral economics to focus on experts who propose policies based on New Paternalism and the apparently unforeseen social costs that their policies may impose. What is the socially optimal intensity of skepticism toward choice architects? Zero skepticism cannot be social-welfare maximizing insofar as voters’ skepticism serves an important role in the political economy of disciplining political power. At the other extreme, maximal skepticism is unlikely to be social-welfare maximizing because it wastes good information that uninformed voters and politically appointed experts would both like to be transmitted and acted upon. Therefore, the socially optimal intensity of skepticism is a strictly interior value somewhere between zero and maximal. Because there is risk of other non-transparent objectives (e.g., lobbying) influencing paternalistic choice architecture, one of its first-order effect is to increase skepticism. As policy makers impose increasingly aggressive policy experiments in choice architecture under the cover of social science (behavioral economics, in this case), the political economy shifts down a slippery slope along which individual response functions (e.g., updating of subjective beliefs) rationally select increasingly skeptical views of expert advice and government speech. Social costs from information loss and reduced coordination services (that would otherwise have been achieved by decentralization without choice architecture) suggest a more cautionary approach to policy and regulation. New Paternalism risks rationalizing increased skepticism which, in its limit, can rationalize conspiracy theories about shrouded objectives influencing choice architects.
{"title":"Decentralization Mislaid: On New\u0000 Paternalism and Skepticism toward\u0000 Experts","authors":"N. Berg","doi":"10.1561/105.00000099","DOIUrl":"https://doi.org/10.1561/105.00000099","url":null,"abstract":"The goal of making people better off “by their own standard†in the New Paternalism research program of Thaler-and-Sunsteininspired “nudging†raises a number of theoretical and practical risks. Some of these risks are straightforward. Others are subtle. I enumerate rarely acknowledged risks that nudging programs face based on informational loss, forgone individual payoffs, and social welfare losses. This essay draws on neoclassical information economics, social welfare theory, and the methodological literature on normative behavioral economics to focus on experts who propose policies based on New Paternalism and the apparently unforeseen social costs that their policies may impose. What is the socially optimal intensity of skepticism toward choice architects? Zero skepticism cannot be social-welfare maximizing insofar as voters’ skepticism serves an important role in the political economy of disciplining political power. At the other extreme, maximal skepticism is unlikely to be social-welfare maximizing because it wastes good information that uninformed voters and politically appointed experts would both like to be transmitted and acted upon. Therefore, the socially optimal intensity of skepticism is a strictly interior value somewhere between zero and maximal. Because there is risk of other non-transparent objectives (e.g., lobbying) influencing paternalistic choice architecture, one of its first-order effect is to increase skepticism. As policy makers impose increasingly aggressive policy experiments in choice architecture under the cover of social science (behavioral economics, in this case), the political economy shifts down a slippery slope along which individual response functions (e.g., updating of subjective beliefs) rationally select increasingly skeptical views of expert advice and government speech. Social costs from information loss and reduced coordination services (that would otherwise have been achieved by decentralization without choice architecture) suggest a more cautionary approach to policy and regulation. New Paternalism risks rationalizing increased skepticism which, in its limit, can rationalize conspiracy theories about shrouded objectives influencing choice architects.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000099","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46437002","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
C. Mckenzie, Shlomi Sher, Lim M. Leong, Johannes Müller-Trede
Preferences must be constructed at least some of the time. This, by itself, is not problematic for rationality. At issue is whether the construction is done in a reasonable manner. The common view is that preference construction violates coherence principles that are basic requirements of rational choice. However, traditional coherence principles are static and implicitly assume that the choice context provides no relevant information. In lab experiments, decision makers often evaluate or choose between options that are unfamiliar or even fictitious, and they may look to the context for choice-relevant cues that help them update their beliefs and construct their preferences. We review evidence that a number of apparent “biases†in decision making stem from adaptive sensitivity to subtle contextual cues. These context effects are dynamically coherent, in that preference-updating is coordinated with reasonable context-dependent belief-updating. This perspective on preference construction not only provides a different view of the psychology and rationality of decision making, it also suggests a different approach to choice architecture. Whereas the traditional nudge approach tries to engineer specific decision outcomes, often by rerouting apparent biases so that they point in desirable directions, the present approach seeks to facilitate processes in order to help people make rational decisions.
{"title":"Constructed Preferences, Rationality,\u0000 and Choice Architecture","authors":"C. Mckenzie, Shlomi Sher, Lim M. Leong, Johannes Müller-Trede","doi":"10.1561/105.00000091","DOIUrl":"https://doi.org/10.1561/105.00000091","url":null,"abstract":"Preferences must be constructed at least some of the time. This, by itself, is not problematic for rationality. At issue is whether the construction is done in a reasonable manner. The common view is that preference construction violates coherence principles that are basic requirements of rational choice. However, traditional coherence principles are static and implicitly assume that the choice context provides no relevant information. In lab experiments, decision makers often evaluate or choose between options that are unfamiliar or even fictitious, and they may look to the context for choice-relevant cues that help them update their beliefs and construct their preferences. We review evidence that a number of apparent “biases†in decision making stem from adaptive sensitivity to subtle contextual cues. These context effects are dynamically coherent, in that preference-updating is coordinated with reasonable context-dependent belief-updating. This perspective on preference construction not only provides a different view of the psychology and rationality of decision making, it also suggests a different approach to choice architecture. Whereas the traditional nudge approach tries to engineer specific decision outcomes, often by rerouting apparent biases so that they point in desirable directions, the present approach seeks to facilitate processes in order to help people make rational decisions.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":"1 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000091","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42132903","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
People often make bad judgments. A big brother or sister who was wise, well-informed, and properly-motivated could often make better decisions for almost everyone. But can governments, which are not staffed with ideal big brothers or sisters, improve upon the mediocre decisions individuals make? If so, when and how? The risks of extending the reach of government into guiding individual lives must also be addressed. This essay addresses three questions concerning when paternalistic policies can be efficacious, efficient, and safe: 1. In what circumstances can policy makers be confident that they know better than individuals how individuals can best promote their own well-being? 2. What are the methods governments can use to lead people to make decision that are better for themselves? 3. What are the moral pluses and minuses of these methods? Answering these questions defines a domain in which paternalistic policy is an attractive option.
{"title":"Efficacious and Ethical Public\u0000 Paternalism","authors":"D. Hausman","doi":"10.1561/105.00000090","DOIUrl":"https://doi.org/10.1561/105.00000090","url":null,"abstract":"People often make bad judgments. A big brother or sister who was wise, well-informed, and properly-motivated could often make better decisions for almost everyone. But can governments, which are not staffed with ideal big brothers or sisters, improve upon the mediocre decisions individuals make? If so, when and how? The risks of extending the reach of government into guiding individual lives must also be addressed. This essay addresses three questions concerning when paternalistic policies can be efficacious, efficient, and safe: 1. In what circumstances can policy makers be confident that they know better than individuals how individuals can best promote their own well-being? 2. What are the methods governments can use to lead people to make decision that are better for themselves? 3. What are the moral pluses and minuses of these methods? Answering these questions defines a domain in which paternalistic policy is an attractive option.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000090","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48993730","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
While behavioral economics has had a major impact on positive theorizing in economics, it remains unclear what exactly those new insights about deviations from rational choice mean in terms of policy implications. Given the ever-rising interest in the new, psychologically informed economics, this paper outlines the way in which reasoning about the normative implications of behavioral economics has developed in the last decade. We argue that behavioral economics has inspired new thinking about the prospect of ‘behavioral normative economics’ (BNE). The paper sketches important approaches in the field, discusses their theoretical shortcomings, and outlines some initial ideas on how to conceptualize individuals’ identity as a key task in BNE. We suggest that the dualistic concepts of the individual should be abandoned in favor of a notion of a unified self that is constituted by its capacity to learn and reflect upon new preferences on a continuous basis.
{"title":"Toward A Behavioral Foundation\u0000 of Normative Economics","authors":"M. Dold, Christian Schubert","doi":"10.1561/105.00000097","DOIUrl":"https://doi.org/10.1561/105.00000097","url":null,"abstract":"While behavioral economics has had a major impact on positive theorizing in economics, it remains unclear what exactly those new insights about deviations from rational choice mean in terms of policy implications. Given the ever-rising interest in the new, psychologically informed economics, this paper outlines the way in which reasoning about the normative implications of behavioral economics has developed in the last decade. We argue that behavioral economics has inspired new thinking about the prospect of ‘behavioral normative economics’ (BNE). The paper sketches important approaches in the field, discusses their theoretical shortcomings, and outlines some initial ideas on how to conceptualize individuals’ identity as a key task in BNE. We suggest that the dualistic concepts of the individual should be abandoned in favor of a notion of a unified self that is constituted by its capacity to learn and reflect upon new preferences on a continuous basis.","PeriodicalId":43339,"journal":{"name":"Review of Behavioral Economics","volume":" ","pages":""},"PeriodicalIF":0.6,"publicationDate":"2018-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1561/105.00000097","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48829160","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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