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Ruining popcorn? The welfare effects of information

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  • Cass R. Sunstein

    (Harvard Law School)

Abstract

Some information is beneficial; it makes people’s lives go better. Some information is harmful; it makes people’s lives go worse. Some information has no welfare effects at all; people neither gain nor lose from it. Under prevailing executive orders, federal agencies must investigate the welfare effects of information by reference to cost-benefit analysis. Federal agencies have (1) claimed that quantification of benefits is essentially impossible; (2) engaged in “breakeven analysis”; (3) projected various endpoints, such as health benefits or purely economic savings; and (4) relied on private willingness to pay for the relevant information. All of these approaches run into serious objections. With respect to (4), people may lack the information that would permit them to make good decisions about how much to pay for (more) information; they may not know the welfare effects of information. Their tastes and values may shift over time, in part as a result of information. These points suggest the need to take the willingness-to-pay criterion with many grains of salt, and to learn more about the actual effects of information, and of the behavioral changes produced by information, on people’s experienced well-being.

Suggested Citation

  • Cass R. Sunstein, 2019. "Ruining popcorn? The welfare effects of information," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 121-142, June.
    • Handle: RePEc:kap:jrisku:v:58:y:2019:i:2:d:10.1007_s11166-019-09300-w
    DOI: 10.1007/s11166-019-09300-w
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    Citations

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    Cited by:

    1. Linda Thunström & Chian Jones Ritten, 2019. "Endogenous attention to costs," Journal of Risk and Uncertainty, Springer, vol. 59(1), pages 1-22, August.
    2. W. Kip Viscusi, 2022. "Efficiency criteria for nudges and norms," Public Choice, Springer, vol. 191(3), pages 465-482, June.
    3. Laffan, Kate & Sunstein, Cass & Dolan, Paul, 2021. "Facing it: assessing the immediate emotional impacts of calorie labelling using automatic facial coding," LSE Research Online Documents on Economics 112453, London School of Economics and Political Science, LSE Library.
    4. Richard Völker & Sven Grüner, 2023. "Animal protection and information avoidance," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 7, pages 109-128, Edward Elgar Publishing.
    5. Völker, Richard & Gruener, Sven, 2023. "Wollen wir überhaupt wissen, wie der Status quo im Tierschutz ist?," OSF Preprints pbyfg, Center for Open Science.
    6. Michael R. Eber & Cass R. Sunstein & James K. Hammitt & Jennifer M. Yeh, 2021. "The modest effects of fact boxes on cancer screening," Journal of Risk and Uncertainty, Springer, vol. 62(1), pages 29-54, February.
    7. Stutzer, Alois, 2020. "Happiness and public policy: a procedural perspective," Behavioural Public Policy, Cambridge University Press, vol. 4(2), pages 210-225, July.
    8. Sunstein, Cass R., 2021. "Viewpoint: Are food labels good?," Food Policy, Elsevier, vol. 99(C).
    9. Reisch, Lucia A. & Sunstein, Cass R. & Kaiser, Micha, 2021. "What do people want to know? Information avoidance and food policy implications," Food Policy, Elsevier, vol. 102(C).
    10. Christopher. A. Kelly & Tali Sharot, 2021. "Individual differences in information-seeking," Nature Communications, Nature, vol. 12(1), pages 1-13, December.
    11. George Loewenstein & Zachary Wojtowicz, 2023. "The Economics of Attention," CESifo Working Paper Series 10712, CESifo.
    12. Áron Tóbiás, 2023. "Cognitive limits and preferences for information," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 46(1), pages 221-253, June.
    13. Lohmann, Paul M. & Gsottbauer, Elisabeth & Doherty, Anya & Kontoleon, Andreas, 2022. "Do carbon footprint labels promote climatarian diets? Evidence from a large-scale field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    14. W. Kip Viscusi, 2019. "Risk guideposts for a safer society: Introduction and overview," Journal of Risk and Uncertainty, Springer, vol. 58(2), pages 101-119, June.
    15. Linda Thunström, 2020. "Thoughts and prayers – Do they crowd out charity donations?," Journal of Risk and Uncertainty, Springer, vol. 60(1), pages 1-28, February.

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