Should Policies Nudge People To Make Certain Choices?
The Wall Street Journal's ECONOBLOG has a very interesting debate between economists Mario Rizzo (NYU) and Richard Thaler (Chicago) on the following question:
Driven by research in behavioral economics that suggests people don't always act in their own best interests, some economists are arguing for new policies that would challenge traditional "hard" tools for changing behavior, such as sin taxes and outright bans. Such policies would often rely on default options that nudge, steer and coax — but don't force — individuals to make certain choices. Is this sensible governance?The debate concerns the merits of so-called "libertarian paternalism" promoted by Thaler and Cass Sunstein. In the exchange, Mario questions the merits of this approach as well as whether it is fair to characterize it as "libertarian." You can comment on the WSJ website here.