Sunday, October 25, 2009

Nudge nudge, wink wink

The whole "Nudge" train always bothered me as being paternalistic. But if it was about helping people make better decisions (by their own criteria) as opposed to some policy maker's, maybe thats not so bad. Although we have had "sin taxes" - a less than subtle nudge- for years. This paper investigates non-pateralistic nudging & not a reference to Monty Python in sight.

The Choice Architecture of Choice Architecture: Toward a Nonpaternalistic Nudge Policy
David Colander, Andrew Qi Lin Chong

The goal of nudge policy is generally presented as assisting people in finding their “true” preferences. Supporters argue that nudge policies meet a libertarian paternalism criterion. This claim has provoked complaints that nudge policies are unacceptably paternalistic. This paper suggests that by changing the explicit goal of nudge policy to a goal of making the choice of choice mechanism an explicit decision variable of the subgroup being affected by the nudge one can have a non-paternalistic nudge policy that better fits with the values inherent in Classical liberalism. The goal of non-paternalistic nudge policy is not to achieve a better result as seen by government or by behavioral economists. The goal of non-paternalistic nudge policy is to achieve a better result as seen by the agents being nudged as revealed through their choices of choice mechanisms.

1 comment:

Liam Delaney said...

Nice posts Kevin. I have read through this paper. Certainly, the extent to which behavioural interventions require an idea of "true preferences" is a key issue. I think the original "libertarian paternalism" articles push very strongly in the direction of making choices "easier" so that people can express their own preferences as they define them. The Nudge brand has fanned out a little to include a lot of things that more resemble paternalistic behaviour modifications.

When I was teaching this stuff this year, the main thing that came through in the class discussions was something I call (borrowing from Harold Bloom) "anxiety of influence". A lot of the students were a little freaked by the idea that people would consciously be altering choice formats to improve their welfare. Of course, you can (and I did) point out that this happens all the time in every walk of life anyway.