Behavioural Decisions and Policy
AbstractWe study the public policy implications of a model in which agents do not fully internalize all the conscequences of their actions. Such a model unifies seemingly disconected models with behavioral agents. We evaluate the scope of paternalistic and libertarian-parternalistic policies in the light of our model, and propose an alternative type of approach, called soft-libertarian, which guides the decision makers in the internalization of all the conscequences of their actions. Psychotherapy is one example of a soft-libertarian policy. Moreover, we show that in our behavioral framework, policies that increase the set of opportunities or provide more information to the agent may not longer be individual welfare improving.
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Bibliographic InfoPaper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 37.
Date of creation: 2010
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Behavioral Decisions; Revealed Preferences; Normative Preferences; Paternalism; Soft-Libertarian; Autonomy; Psychotherapy;
Other versions of this item:
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D60 - Microeconomics - - Welfare Economics - - - General
- I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-CBE-2011-01-03 (Cognitive & Behavioural Economics)
- NEP-UPT-2011-01-03 (Utility Models & Prospect Theory)
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