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The Marginal Benefit of Manipulation: Investigating paternalistic interventions in the context of intertemporal choice

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  • John Gustavsson

    (Department of Economics, Finance and Accounting, Maynooth University.)

Abstract

Libertarian paternalism (LP) has gained popularity in recent years as an alternative way for governments to induce consumers into making “good” decisions. Many, however, question the ethics of such interventions, calling them a form of psychological manipulation, and instead argue interventions should focus on expanding the information set available to consumers and encouraging consumers to reason their way to the right decision. Such interventions are known as Autonomy-Enhancing Paternalism. The question remains how effective such interventions are relative to LP interventions. In this paper I introduce the term Marginal Benefit of Manipulation (MBoM), the difference between the treatment effect of an LP and an AEP intervention. I find that the AEP intervention does not succeed in altering behavior, but the LP intervention does not fare better and may backfire when participants are exposed to it repeatedly. Neither intervention had any significant effect on behavior beyond the immediate present. Classification-

Suggested Citation

  • John Gustavsson, 2016. "The Marginal Benefit of Manipulation: Investigating paternalistic interventions in the context of intertemporal choice," Economics Department Working Paper Series n276-16.pdf, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n276-16.pdf
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    Cited by:

    1. John S.M Gustavsson, 2017. "The Marginal Cost of Transparency: Do honest nudges work?," Economics Department Working Paper Series n289-17.pdf, Department of Economics, National University of Ireland - Maynooth.

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