Vice Squad
Monday, April 14, 2008
 
Nudge


Vice Squad was in the audience this evening when Cass Sunstein spoke about his new book with Richard Thaler, Nudge. Sunstein and Thaler are the impresarios behind Libertarian Paternalism, an approach towards public (and private) policy that is fairly congruent, in the case of vice, with the Robustness Principle. ("Nudge" is a less off-putting synonym for Libertarian Paternalism: the authors also considered "One-Click Paternalism," the idea that you could override a default setting pushing you in a presumably desirable direction with one click of your mouse.) Nevertheless, Nudge does not address policy towards illegal drugs, though it looks as if alcohol, smoking, and gambling receive some attention; I am relying upon the index here.

Sunstein provided a bit of a road map about how he and Thaler were led to collaborate on Libertarian Paternalism and then Nudge. By the late 1990s, behavioral economics (with Thaler in the vanguard) had established fairly convincingly some common shortfalls from rationality, including over-optimism and a rather general disability in dealing with risky situations. Two types of interventions seemed to offer some hope for better results: (1) changing default options to those presumably desirable settings, as many people would just stick with the defaults, even when it was almost costless to choose differently; and (2) allowing people to precommit to putting some of their future raises into savings (Thaler is a co-inventor of "Save More Tomorrow" plans, of which I am a beneficiary). Since then, the idea that "Choice Architecture," the setting in which choices are made, is a powerful determinant of the choices that actually are made, has taken on equal prominence in Nudge. (Shades of "Drug, Set, and Setting.") Sunstein talked about the desirability of "Give More Tomorrow" plans that would allow people to precommit part of their future raises to charity. He also suggested that those of us (the vast majority of the audience) who had not bothered to sign up for automatic bill-paying options were mistaken and paying more (via late fees) while enduring higher transaction costs, too -- we were being overly influenced by the inertia that he also attributed to his continued paid subscriptions to five magazines that he originally received on a temporary, no-charge basis. In the question and answer period -- the architecture was such (involving a walk to a centrally placed microphone) that I did not trouble him with any queries -- Professor Sunstein mentioned the difference between thin and thick concepts of consent. A miner (to use Professor Sunstein's example) can be said to give thin consent to the risk of working underground by taking the job. Thick consent requires more, the notion that adequate information should be absorbed as well -- with the fact that a job was accepted without force or fraud being insufficient to establish thick consent. I am a fan of measures to assure thick consent for legal participation in some vices.

Professor Sunstein currently is guest-blogging about Libertarian Paternalism at the Volokh Conspiracy; his initial contribution is here. [Update: Nudge has its own blog!]

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