Read: Nudge - Improving Decisions about Health, Wealth, and Happiness

The current public interest in behavioral economics is inspired by a number of popular science books on the topic. Or the other way round, I don’t know. Nudge is one of these books. It is coauthored by one of the pioneers of the field, Dick Thaler, professor and director of the Center for Decision Research at the University of Chicago. His coauthor Cass Sunstein, a legal scholar taught at Chicago, too, before he moved to Harvard Law School.

Both authors plead for a philosophy of governmental minimalism. Yet, they recognize that humans make mistakes, take shortcuts in their decision making and are easily directed to certain actions by simple and seemingly innocent changes in the decision environment. The latter is exactly what they argue for: To nudge people in the right direction. Offer people freedom of choice, reasonable defaults if necessary, and structured information to avoid overwhelming the decision maker. Since all this nudging is supposed to improve the well being of the decision maker and the welfare of society they call their policy of gently guided freedom of choice libertarian paternalism.

I do not want to start another discussion about the benefits and perils of such paternalism. Thaler and Sunstein address some of the opposing arguments at the end of their book. This is not where they make their strongest points.

The main text, however, gives a very nice overview of some of the observed regularities in decision making and the resulting applications of behavioral economics during the last decade. Some more controversial topics are discussed in the last third of the book. Here they cover two themes where many people will have strong prior opinions. First, they argue that the government should allow anyone to waive his right to sue for negligence. As a consequence health insurance fees would decrease and better coverage would result. Second, they argue government should privatize marriage and instead introduce civil partnerships. Marriage is mainly a religious concept. The religious rules concerning marriage may sometimes lead to a retrenchment of personal freedom, e.g. in the choice of (approved) partners. Therefore, the state should not link additional privileges or responsibilities to this institution. Instead, the state should recognize a more modern concept of family, a caretaker–dependent relationship. Current privileges, social and economic subsidies for married couples should be transferred to this new entity.

I cannot say that I am not sympathetic to these proposals. I just do not see the nudge…

comments powered by Disqus