Wednesday, August 28, 2013

Cass Sunstein and the The Storrs Lectures at Yale: Behavioral Economics and Paternalism

This is the second post (here's the first) in what will end up being a series on Mr. Sunstein and his belief that government must decide any and all aspects of your life. Mr. Sunstein is President Obama's former regulatory czar and is married to Samantha Power, the U.S. Ambassador to the United Nations.
She is a war monger and the prime influencer behind the President's decision to muck about in Syria and North Africa.

I'm trying to get a feel for what the happy couple's pillow talk must be like and discover if there is a way to make money off these folks.

Via the Social Science Research Network:

The Storrs Lectures: Behavioral Economics and Paternalism

Cass R. Sunstein

Harvard Law School

November 29, 2012

Yale Law Journal, Forthcoming

A growing body of evidence demonstrates that in some contexts and for identifiable reasons, people make choices that are not in their interest, even when the stakes are high. Policymakers in a number of nations, including the United States and the United Kingdom, have used the underlying evidence to inform regulatory initiatives and choice architecture in a number of domains. Both the resulting actions and the relevant findings have raised the question whether an understanding of human errors opens greater space for paternalism. Behavioral market failures, which occur as a result of such errors, are an important supplement to the standard account of market failures; if promoting welfare is the guide, then behavioral market failures should be taken into consideration, even if the resulting actions are paternalistic. A general principle of behaviorally informed regulation – its first law – is that the appropriate responses to behavioral market failures usually consist of nudges, generally in the form of disclosure, warnings, and default rules. While some people invoke autonomy as an objection to paternalism, the strongest objections are welfarist in character. Official action may fail to respect heterogeneity, may diminish learning and self-help, may be subject to pressures from self-interested private groups (the problem of “behavioral public choice”), and may reflect the same errors that ordinary people make. The welfarist arguments against paternalism have considerable force, but choice architecture, and sometimes a form of paternalism, are inevitable, and to that extent the welfarist objections cannot get off the ground. Where paternalism is optional, the objections, though reasonable, depend on empirical assumptions that may not hold in identifiable contexts. There are many opportunities for improving human welfare through improved choice architecture. 

Free SSRN download (60 page PDF)