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Behavioral Decisions and Policy

Author

Listed:
  • Dalton, P.S.

    (Tilburg University, Center For Economic Research)

  • Ghosal, S.

Abstract

We study the public policy implications of a model in which agents do not fully internalize all the conscequences of their actions. Such a model uni es 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 ac- tions. Psychotherapy is one example of a soft-libertarian policy. Moreover, we show that in our behavioral framework, policies that increase the set of oppor- tunities or provide more information to the agent may not longer be individual welfare improving.

Suggested Citation

  • Dalton, P.S. & Ghosal, S., 2010. "Behavioral Decisions and Policy," Discussion Paper 2010-125, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:01082332-70a3-4949-9de6-61bbda6c3934
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    File URL: https://pure.uvt.nl/ws/portalfiles/portal/1288363/2010-125.pdf
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    References listed on IDEAS

    as
    1. Dalton, Patricio & Ghosal, Sayantan, 2008. "Behavioural Decisions and Welfare," The Warwick Economics Research Paper Series (TWERPS) 834, University of Warwick, Department of Economics.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Poor Behavior, Good Behavioral Policies? Double Standards for the North and South
      by Svenja Flechtner in Development Economics on 2017-09-14 15:24:56

    Citations

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    Cited by:

    1. Inge van den Bijgaart, 2018. "Too Slow a Change? Deep Habits, Consumption Shifts and Transitory Tax Policy," CESifo Working Paper Series 6958, CESifo Group Munich.
    2. van den Bijgaart, Inge, 2016. "Essays in environmental economics and policy," Other publications TiSEM 298bee2a-cb08-4173-9fe1-8, Tilburg University, School of Economics and Management.
    3. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    4. van den Bijgaart, I.M., 2017. "Too slow a change? Deep habits, consumption shifts and transitory tax," Working Papers in Economics 701, University of Gothenburg, Department of Economics.
    5. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    6. Schubert Christian & Binder Martin, 2014. "Reconciling Normative and Behavioral Economics: An Application of the “Naturalistic Approach” to the Adaptation Problem," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 350-365, April.

    More about this item

    Keywords

    Behavioral Decisions; Revealed Preferences; Normative Preferences; Paternalism; Soft-Libertarian; Autonomy; Psychotherapy;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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