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In this paper I discuss how Law and Economics can benefit from incorporating some insights from Public Choice into their analyses. Within this argument, I examine the evolution of experimental methods by looking at laboratory, field, and natural experiments; and conducting a very simple scientometrics analysis on the relative frequency of experimental studies in journals such as Public Choice, European Journal of Political Economy, Constitutional Political Economy, Journal of Law and Economics, and Journal of Law, Economics and Organization compared with top economics journals such as American Economic Review, Quarterly Journal of Economics, Journal of Political Economy, Econometrica, or Review of Economic Studies. I also refer to the connectivity of Behavioral Law and Economics and Behavioral Public Choice. The paper then finishes with a discussion of a selected number of topics covering areas such as corruption, tax compliance, shitstorms/firestorms, constitutional choices, globalization, and international organizations; all of which present scientific challenges when applying pure Law and Economics approaches without also implementing a Public Choice analysis. [ABSTRACT FROM AUTHOR]

This paper compares the predictive performance of several models of risk aversion and time preferences in experimental settings. Models are evaluated on the basis of out‐of‐sample prediction rather than in‐sample fit. For preferences over risk, with the exception of very small sample sizes, allowing the estimation procedure to select between constant relative risk aversion and constant absolute risk aversion improves prediction beyond that of a single model. Moreover, adding a behavioural parameter such as disappointment aversion improves prediction further. This contrasts with time preferences, where adding the present‐bias parameter worsens prediction for all sample sizes. [ABSTRACT FROM AUTHOR]

This paper examines whether the ex post relative payoffs of peers as well as the size of the peer group impact an agent's willingness to take risks. For example, persons in a flood plain may be less likely to purchase flood insurance if their neighbors also refrain from purchasing. We generalize the Fehr‐Schmidt (1999) model to allow the intensity of the social preferences to vary with the size of the peer group. Our experiment tests whether subjects are more or less likely to choose a lottery over a fixed payment when others have been assigned either the same lottery or the fixed payment. Using both between and within subject designs, we find risk‐taking behaviour is not responsive to the risks faced by others regardless of the size of peer group. [ABSTRACT FROM AUTHOR]

This paper outlines why a move towards a complex adaptive systems model of behaviour is required if the goal is to generate better understanding of how individuals and groups interact with their environment in a disaster setting. To accomplish this objective, a bridge must be built between the broader social sciences and behavioural economics to incorporate discipline‐specific insights that are needed to move towards complexity. This is only possible through a deeper understanding of behaviour and how the environment in which they occur can influence actions. It is then that one can counteract the poor behavioural predictions, flawed policies based on myth, inefficient design, and suboptimal outcomes that have flourished in the absence of a complex adaptive systems model. This paper provides a conceptual framework that draws on concepts from across the natural and social sciences, such as behavioural economics, endocrinology, psychology, sociobiology, and sociology in order to build an interactive theory of disaster behaviour. [ABSTRACT FROM AUTHOR]

Introduction: Habits are a common strategy for successfully countering medication non‐adherence, yet existing interventions do not support participants during the long habit formation period, resulting in high attrition. We test a novel intervention combining text messages and incentives with anchoring to support antiretroviral therapy (ART) pill‐taking habits. Methods: In a randomized, parallel controlled trial, a sample of 155 participants 18 years and older who initiated ART within 3 months were recruited at Mildmay Uganda between October 2021 and April 2022. All participants were educated on the anchoring strategy and chose an anchor, that is existing routines, to pair with pill‐taking. Participants were randomized to either usual care (C = 49), daily text message reminders to follow their anchoring plan (Messages group; T1 = 49) or messages and incentives conditional on pill‐taking in line with their anchor (Incentives group; T2 = 57). Assessments occurred at baseline, month 3 (end of intervention) and month 9 (end of observation period). The primary outcomes are electronically measured mean adherence and pill‐taking consistent with participants' anchor time. Results: The primary outcome of pill‐taking in line with the anchoring plan was higher in the Incentives group during the 3‐month intervention (12.2 p.p. [95% CI: 2.2 22.2; p =.02]), and remained significantly higher after the incentives were withdrawn (months 4−6 (14.2 p.p. [95% CI 1.1 27.2; p =.03]); months 7−9 (14.1 p.p. [95% CI −0.2 28.5; p =.05])). Mean adherence was higher in both treatment groups relative to the control group during the intervention (T1 vs. C, p =.06; T2 vs. C, p =.06) but not post‐intervention. Conclusions: The promising approach of using incentives to support habit formation among ART treatment initiators needs to be evaluated in a fully powered study to further our understanding of the habit formation process and to evaluate its cost‐effectiveness. [ABSTRACT FROM AUTHOR]

In this paper, I review and assess what we have learned about what motivates individuals to pay – or to not pay – their legally due tax liabilities. I focus on three specific questions. First, what does theory say about what motivates tax compliance? Second, what does the evidence show? Third, how can government use these insights to improve compliance? I conclude with some suggestions – and some predictions – for future research. [ABSTRACT FROM AUTHOR]

In this paper, we suggest that individuals' tax compliance behaviours are affected by the behaviour of their 'neighbours', or those about whom they may have information, whom they may know, or with whom they may interact on a regular basis. Individuals are more likely to file and to report their taxes when they believe that other individuals are also filing and reporting their taxes; conversely, when individuals believe that others are cheating on their taxes, they may well become cheaters themselves. We use experimental methods to test the role of such information about peer effects on compliance behaviour. In one treatment setting, we inform individuals about the frequency that their neighbours submit a tax return. In a second treatment setting, we inform them about the number of their neighbours who are audited, together with the penalties that they pay. In both cases, we examine the impact of information on filing behaviour and also on subsequent reporting behaviour. We find that providing information on whether one's neighbours are filing returns and/or reporting income has a statistically significant and economically large impact on individual filing and reporting decisions. However, this 'neighbour' information does not always improve compliance, depending on the exact content of the information. [ABSTRACT FROM AUTHOR]

It is now commonplace to regard social norms as a subject of growing interest in the economic literature (e.g. game theoretical approaches based on ‘other-regarding’ individual preferences, the analysis of the impact of rewards or punishment on individuals’ behaviour through experimental economics as well as field experiments, the revival of the institutionalist tradition spurred on by the influential work of Douglas North and followed by many others and the growing influence of neuroeconomics). In this paper, we focus on the relationship between incentives and social norms and survey the literature that could constitute the foundations of a motivation-based economic analysis of social norms. Our main findings are that (1) the interaction between incentives and social norms is far from obvious since taking social norms into account involves the introduction of supplementary motives, in addition to self-interest, into the economic analytical framework; (2) the analysis of the interaction between incentives and social norms resists an approach exclusively in terms of crowding-in and -out effects because it is sensitive to whether it concerns behaviours driven by honour or by social stigma; (3) as a result, it is difficult to precisely evaluate the policy implication of the interactions between incentives and social norms. [ABSTRACT FROM AUTHOR]

This paper reviews two contrasting approaches governments use to engage the citizen to promote better public policy outcomes: nudging citizens using the insights of behavioural economics, as summarised by Thaler and Sunstein (2009) or giving citizens the space to think through and debate solutions, as indicated by proponents of deliberative democracy. The paper summarises each approach, giving examples; then it compares and contrast them, illustrating their relative strengths and weaknesses. The paper concludes by suggesting that the approaches share some common features and policy-makers could useful draw upon both. [ABSTRACT FROM AUTHOR]

Research in behavioural economics has uncovered the widespread phenomenon of people making decisions against their own good intentions. In these situations, the government might want to intervene, indeed individuals might want the government to intervene, to induce behaviour that is closer to what individuals wish they were doing. The analysis of such corrective interventions, through taxes and subsidies, might be called ‘behavioural public economics’. However, such analysis, where the government has an objective function that is different from that of individuals, is not new in public economics. In these cases the government is said to be ‘non-welfarist’ in its objectives, and there is a long tradition of non-welfarist welfare economics, especially the analysis of optimal taxation and subsidy policy where the outcomes of individual behaviour are evaluated using a preference function different from the one that generated the outcomes. First of all the object of this paper is to present a unified view of the non-welfarist optimal taxation literature and, second, to present behavioural public economics as a natural special case of this general framework. [ABSTRACT FROM AUTHOR]

This paper provides a review of economic studies that analyses the use of multiple policies to cope with waste management problems. We discuss the factors that influence selective sorting behaviour, and the most appropriate policies for their promotion. Based on the works analysed, our survey shows the original features of waste as an environmental problem requiring regulation. The traditional approach in which decisions respond to rational behaviour, particularly cost savings, has some limits. Although not all public policies seem justified, we argue that there might be a need for specific policies to promote recycling, preferably based on the provision of information to consumers or on behavioural instruments. Indeed, personal factors specific to each individual - such as emotions and the influence of social interaction - should be taken into account in the development of public policies. We review the literature related to different rationales and identify some avenues for future research. [ABSTRACT FROM AUTHOR]

The paper reviews recent models that have applied the techniques of behavioural economics to the analysis of the tax compliance choice of an individual taxpayer. The construction of these models is motivated by the failure of the Yitzhaki version of the Allingham-Sandmo model to predict correctly the proportion of taxpayers who will evade and the effect of an increase in the tax rate upon the chosen level of evasion. Recent approaches have applied non-expected utility theory to the compliance decision and have addressed social interaction. The models we describe are able to match the observed extent of evasion and correctly predict the tax effect but do not have the parsimony or precision of the Yitzhaki model. [ABSTRACT FROM AUTHOR]

Community‐based conservation is a widely adopted wildlife governance approach, but questions remain about the conditions under which this form of wildlife governance achieves success. Particularly, participating communities are often marked by considerable wealth and risk heterogeneities that are driven by differences in livestock or agricultural holdings and varying exposure to wildlife depredation of those holdings.The effect of these types of heterogeneity on successful conservation collective action is understudied, particularly in the case of risk heterogeneity. This lacuna limits policymakers' ability to effectively match the design of community‐based programs to their particular settings.Using established behavioural experimental techniques, we model the incentive structures underlying community‐based wildlife conservation where actors differ in wealth and exposure to human–wildlife conflict. We conduct a modified binary linear voluntary contribution mechanism game, in which we vary subject endowments and risk of incurring a loss when participating in collective action and we find that the type of heterogeneity matters to collective action success.On their own, the presence of either economic or risk heterogeneities (but not both) dampen cooperation compared with homogeneous groups, as do 'balanced' distributions of both heterogeneities (where individuals facing high risk levels receive high endowments and vice versa). However, groups with 'unbalanced' heterogeneities (where those facing high risk levels receive low endowments and vice versa) demonstrate cooperation at similar levels to that of homogeneous groups.At the individual level, risk drives cooperative behaviour, although its impact is influenced by relative wealth levels when both forms of heterogeneity are present.These findings suggest the need for a more in‐depth look at the role and interaction of risk and wealth heterogeneities in conservation management. Read the free Plain Language Summary for this article on the Journal blog. Read the free Plain Language Summary for this article on the Journal blog. [ABSTRACT FROM AUTHOR]

The article considers the reasons for employees holding large proportions of their financial savings and investments in company stock, drawing on explanations proposed in the behavioral finance literature. Utilizing data from a survey of employees participating in the United Kingdom Save as You Earn stock options and savings scheme, it is found that substantial proportions of stock owners hold sizeable concentrations of employer stock. Several explanations for this risky behavior are tested, with familiarity, reciprocity, and inertia found to be associated with portfolio concentration. Organizational commitment and “naïve extrapolation” from recent stock prices are not. The implications for theory and practice are considered. [ABSTRACT FROM AUTHOR]

Financial crises often seem to be associated with populism, although the populist banking policies introduced to address such crises are far from homogenous. This apparent paradox—a sort of "sight‐unseen consensus"—suggests that specific economic drivers coupled with general psychological components can explain populist consensus. We propose a model of populist consensus, which we term "democratic rioting," in which individuals' decisions to support or resist a specific populist bailout policy after a financial crisis are heavily influenced by psychological group dynamics. Those dynamics, in turn, are driven by general, non‐banking‐related motivations, such as anti‐elite sentiments. In a multiple equilibria setting, the more individuals are unhappy for general economic and/or psychological reasons, the more likely they are to support myopic and redistributive populist banking policies rather than long‐sighted public interventions. [ABSTRACT FROM AUTHOR]

The Global South contains low‐information environments that impose information search costs on organisations. We compare explanations for how employers make decisions in these environments. To do so, we analyse salaries collected from employers in Haiti, including local and international non‐profits and domestic and foreign businesses. Although preliminary findings suggest that international non‐governmental organisations pay above‐market salaries, accounting for alternative explanations from behavioural economics causes the organisational form's importance to dissipate. We find that anchoring and framing mechanisms separately influence decision‐making. These findings direct us to focus more on the actions and tools managers use to make decisions in low‐information environments. [ABSTRACT FROM AUTHOR]

Governments around the world have increasingly used experimental findings from behavioural trials to fine‐tune their service delivery policy models and their communication with citizens. In some areas of policy review, government teams have drawn on 'behavioural' methods, developed through Behavioural Insights (BI) and Behavioural Economics (BE) approaches, with a view to enhancing cost‐efficiencies and regulatory compliance. We compare the practices of several teams in Australia and New Zealand, based on 40 practitioner interviews with staff in governmental BI–BE units. We outline staff perceptions about the challenges and opportunities for BI–BE units in their quest to make positive contributions to policy innovation in the informational, regulatory, and service domains. In most instances, their focus has been on selecting specific researchable topics where experimental methods can be deployed, and where measurable positive changes are anticipated. Although benefits have been produced in many such areas, complex issues have not yet been tackled. However, BI–BE approaches could potentially contribute to broader teams addressing more complex problems. We compare the practices of several teams in Australia and New Zealand, based on 40 practitioner interviews with staff in governmental BI–BE units. We outline staff perceptions about the challenges and opportunities for BI–BE units in their quest to make positive contributions to policy innovation in the informational, regulatory, and service domains. [ABSTRACT FROM AUTHOR]

Peer networks can positively affect individual careers and the scientific enterprise as a whole. People's willingness to contribute to such networks is poorly understood. In an email experiment, we investigated how framing the future research environment affects people's willingness to contribute to an emerging academic network. In spite of relatively large treatment effects, we do not find statistically significant effects of pessimistic or optimistic messaging on the willingness to contribute. We discuss limitations of the small sample size and the future research potential of network nudges. [ABSTRACT FROM AUTHOR]

The last decade has produced a large literature on the public policy implications of behavioural research. Policymakers, in turn, have increasingly relied on 'choice architecture' or 'nudges' to address some of the consequences of individuals' judgment and decision‐making biases documented by that research. However, the possibilities for mitigating the effects of individuals' biases in the realm of collective choice have not yet been exhaustively explored. This article suggests possible applications of behavioural research to mitigate the negative effects of voters' judgment and decision‐making biases on the quality of democratic choice. [ABSTRACT FROM AUTHOR]

Randomized controlled trials (RCTs) by behavioral economists pretend to be pragmatic and only interested in what works to solve practical problems, but in reality, they have notorious normative and ideological aspects. Behavioral RCTs ignore contexts and composition effects and reflect the biases of those who perform assessments. Behavioral randomizers presume without demonstrating that market exchanges are the most effective form of regulation for societies in all situations of social life. The positive or negative incentives ("nudges") offered by behavioral economics aim to normalize the behavior of consumers, users, employees, or small/independent producers. They are part of a set of power devices by which individual behaviors are shaped and forced, without their knowledge, to conform to dominant class interests. [ABSTRACT FROM AUTHOR]

Abstract: The recent popularity of ‘nudge’ – involving governments structuring choices to lead individuals to choose outcomes which policymakers wish to encourage – has given rise to a belief that ‘libertarian paternalism’ offers a modern substitute for classical liberalism. But most governments are more paternalistic and less libertarian than nudge theorists. If ‘nudge’ was taken seriously, many existing laws would be repealed and few new laws would be made. [ABSTRACT FROM AUTHOR]

The market economy can be defended using the lens of virtue ethics. Modern virtue ethics was developed originally by the English philosopher Elizabeth Anscombe. Virtue ethics rejects consequentialism and focuses on the virtues. And human nature appears to be collaborative in both language and economic relations exemplified by exchange. By adapting the concept of 'characteristic virtues', developed by Alasdair MacIntyre, it follows that collaboration has its own particular virtues. These virtues can produce prescriptions which mitigate the costs of economic transactions and collaboration. The development of behavioural economics has shown human beings sometimes fall short of the rationality described by neo-classical microeconomics. But virtuous action tends to correct these deficiencies. [ABSTRACT FROM AUTHOR]

Financial literacy has been recognised as a vital life skill, but there is little evidence of the factors behind the differences in managing personal finance. Socio-economic factors and the provision of financial education do explain the variance in financial literacy in some countries, but not in all. In the PISA 2012 financial literacy test, Estonian students ranked very highly in international comparison; although only a few had received financial education at school. Compared with other countries, socio-economic factors explained the smallest proportion of variance in the test score. There was, however, a significant difference between the mean financial literacy scores of Estonian- and Russian-language communities. The aim of the article is to analyse the factors behind the differences in financial literacy when financial education is not provided. It also offers insight into how students in a similar education system in two different cultural and language frameworks achieve different financial literacy scores. Moreover, the results demonstrate how indicators, such as family background can work through different channels as opposed to the usual parental education or occupation based socio-economic indicators. The latter implies that unexplained factors remain, such as cultural, developmental and societal indicators, which most researchers pay little attention to when explaining efficient policies for improving financial literacy. Multivariate regression models show that the level of financial literacy in Estonia is correlated with gender, language of the school, the number of books at home, mathematics and reading scores. The Blinder-Oaxaca decomposition explains less than half of the gap between the two communities. The only variable significantly explaining the gap is the number of books at home. Books can be interpreted as a symbol of social status, evidence of cultural background or source of influence for broader picture and better problem solving skills. [ABSTRACT FROM AUTHOR]

The importance of involving stakeholders in sustainability policymaking is widely recognized. Current methods of stakeholder involvement in environmental policymaking neither systematically identify stakeholders based on their roles in sustainability nor understand them from a behavioural level; moreover, strategies formulated to address the problems do not explicitly address possible conflicts among different policies. To fill these gaps, an integrated framework for stakeholder identification, understanding, engagement and role management is proposed. This framework is based on extensive review and application of principles in sustainability, life cycle assessment, behavioural science, soft operational research and coherently integrated sustainability policymaking. This framework was partially applied to a case study of a household energy intervention program in the South West District of Singapore. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment [ABSTRACT FROM AUTHOR]

Background Insufficient evidence exists to support obesity prevention in paediatric primary care. Objectives To test a theory-based behaviour modification intervention delivered by trained paediatric primary care providers for obesity prevention. Methods Efficacy trial with cluster randomization (practice level) and a 12-session 12-month sweetened beverages decrease intervention or a comprehensive dietary and physical activity intervention, compared with a control intervention among children ages 8-12 years. Results A low recruitment rate was observed. The increase in body mass index z-score ( BMIz) for the 139 subjects (11 practices) randomized to any of the two obesity interventions (combined group) was less than that of the 33 subjects (five practices) randomized to the control intervention (−0.089, 95% confidence interval [ CI]: −0.170 to −0.008, P = 0.03) with a −1.44 kg weight difference (95% CI: −2.98 to +0.10 kg, P = 0.095). The incidences of obesity and excess weight gain were lower in the obesity interventions, but the number of subjects was small. Post hoc analyses comparing the beverage only to the control intervention also showed an intervention benefit on BMIz (−0.083, 95% CI: −0.165 to −0.001, P = 0.048). Conclusions For participating families, an obesity prevention intervention delivered by paediatric primary care clinicians, who are compensated, trained and continuously supported by behavioural specialists, can impact children's BMIz. [ABSTRACT FROM AUTHOR]

Utilitarian foundations for limited government are shaky insofar as they assume rational and consistent individuals. Recently economists' assumption of rational actors has come under sustained attack. Behavioural economics has suggested that people are plagued by irrational biases and inconsistencies. These developments have led to a post-utilitarianism which is held to justify paternalistic interventions by the state via 'sin taxes', direct bans or new obligations. Individual responsibility is seriously undermined, as is faith in markets. Supporters of individual freedom need to move away from utilitarian reasoning, reassert core values of autonomy and responsibility, and define strict limits on the scope of government intervention. [ABSTRACT FROM AUTHOR]

The emerging discipline of behavioural economics has established that humans do not follow the canonical rules of rational utility maximization that were the foundation of neoclassical economics. If people were rational economic agents, their behaviour would be highly predictable. No unifying predictive framework for actual economic behaviour has emerged to replace the canonical assumption of utility maximization. I suggest here that evolutionary biology can play a role in forging a new theoretical framework for behavioural economics. I argue that some apparently irrational economic behaviours can be understood as products of the hunter-gatherer ecology in which humans evolved. I discuss three examples of anomalous behaviour: hyperbolic time discounting, context-dependent preferences and contribution to public goods. In each case, 'irrational' decisions are less surprizing when we recognize the evolutionary roots of the behaviour. Cultural effects remain relevant in an evolutionary account of economic behaviour. Indeed, an evolutionary perspective may help us anticipate economic behaviour and create sustainable societies in the novel, globalized economy that we have created. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Conventional economics, which is based on Homo economicus, cannot provide a satisfactory explanation for the global financial crisis. However, behavioural economics, and the concept of present bias, self-serving bias, ‘new era’ stories, money illusion, comparisons with reference levels and herding, can provide an explanation. [ABSTRACT FROM AUTHOR]