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Although there has been a proliferation of research and policy work into how nudges shape people's behaviour, most studies stop far short of consumer welfare analysis. In the current work, we critically reflect on recent efforts to provide insights into the consumer welfare impact of nudges using willingness to pay and subjective well-being reports and explore an unobtrusive approach that can speak to the immediate emotional impacts of a nudge: automatic facial expression coding. In an exploratory lab study, we use facial expression coding to assess the short-run emotional impact of being presented with calorie information about a popcorn snack in the context of a stylised 'Cinema experience'. The results of the study indicate that calorie information has heterogeneous impacts on people's likelihood of choosing the snack and on the emotions they experience during the moment of choice which varies based on their level of health-consciousness. The information does not, however, affect the emotions people go on to experience while viewing movie clips, suggesting that the emotional effects of the information are short-lived. We conclude by emphasising the potential of automatic facial expression coding to provide new insights into the immediate emotional impacts of nudges and calling for further research into this promising technique. [ABSTRACT FROM AUTHOR]

This article explores the limited policy implications of evolutionary explanations for human behavior. It argues that while evolutionary explanations for biases like present bias, optimistic overconfidence, and the availability heuristic may be plausible, they do not necessarily justify or negate the need for policy interventions. The article suggests that policymakers should not base their actions solely on whether biases have evolutionary or cultural explanations. It also acknowledges that cultural differences can influence behavioral public policy and that international variations in risk preferences may have evolutionary explanations. The article examines Oliver's argument about risk aversion and risk-seeking behavior in relation to conditions of abundance and scarcity, but questions the validity of these claims due to individual and community heterogeneity in risk preferences. The author also challenges the connection between probabilities and perceptions of abundance or scarcity, and argues that even if there is an evolutionary explanation for risk preferences, it does not necessarily mean that those preferences are rational or promote welfare. The article concludes by discussing the implications of these findings for policy, particularly in relation to gambling behavior. [Extracted from the article]

In The Rhetoric of Reaction, published in 1991, Albert Hirschman identified three standard objections to reform proposals: perversity, futility and jeopardy. In Hirschman's account, these objections define reactionary rhetoric. A proposal would be "perverse" if it would aggravate the very problem it is meant to solve; it would be "futile" if it would not even dent the problem; it would produce "jeopardy" if it would endanger some other goal or value (such as liberty or economic growth). The rhetoric of reaction comes from both left and right, though in Hirschman's account, it is a special favorite of the right. In recent years, the perversity, futility and jeopardy theses have often been invoked to challenge reforms, including nudges. While the three theses are sometimes supported by the evidence, they are often evidence-free speculations, confirming Hirschman's suggestion that the rhetoric of reaction has "a certain elementary sophistication and paradoxical quality that carry conviction for those who are in search of instant insights and utter certainties." [ABSTRACT FROM AUTHOR]

A uniform value of a statistical life (VSL) is part of established practice within the federal government. Some people have applauded a uniform VSL on the ground that it respects the equality of persons; takes harm to poor people as seriously as it does harm to wealthy people; avoids expressive harms; and builds appropriate wealth redistribution into regulatory policy. Other people have strenuously objected to a uniform VSL, emphasizing that to reduce mortality risks, poor people are willing to pay less than rich people are, and urging that poor people should not have to pay more than they are willing to pay. Whether a uniform VSL is in the interest of poor people depends on whether we are dealing with subsidies or regulations. In the case of subsidies, a uniform VSL is highly likely to benefit poor people. If we are dealing with regulations, we cannot know whether a uniform VSL helps or harms poor people without knowing the incidence of costs (and benefits). [ABSTRACT FROM AUTHOR]

Chater & Loewenstein, superb and distinguished social scientists, have misfired. Their complaint is baseless: In the real world of policymaking, behavioral science is mostly being used to reform systems, not to alter individual behavior. Nor is there empirical support for the proposition that interventions aimed at helping individuals make systemic reform less likely. [ABSTRACT FROM AUTHOR]

One of Friedrich Hayek's most important arguments pointed to the epistemic advantages of the price system, regarded as an institution. As Hayek showed, the price system incorporates the information held by numerous, dispersed people. Like John Stuart Mill, Hayek also offered an epistemic argument on behalf of freedom of choice. A contemporary challenge to that epistemic argument comes from behavioral economics, which has uncovered an assortment of reasons why choosers err, and also pointed to possible distortions in the price system. But, even if those findings are accepted, what should public institutions do? How should they proceed? A neo-Hayekian approach would seek to reduce the knowledge problem by asking what individual choosers actually do under epistemically favorable conditions. In practice, that question can be disciplined by asking five subsidiary questions: (1) What do consistent choosers, unaffected by self-evidently irrelevant factors, end up choosing? (2) What do informed choosers choose? (3) What do active choosers choose? (4) When people are free of behavioral biases, including (say) present bias or unrealistic optimism, what do they choose? (5) What do people choose when their viewscreen is broad, and they do not suffer from limited attention? These questions are illustrated with reference to the intense controversy over fuel economy standards. [ABSTRACT FROM AUTHOR]

Consumers, employees, students and others are often subjected to 'sludge': excessive or unjustified frictions, such as paperwork burdens, that cost time or money; that may make life difficult to navigate; that may be frustrating, stigmatizing or humiliating; and that might end up depriving people of access to important goods, opportunities and services. Because of behavioral biases and cognitive scarcity, sludge can have much more harmful effects than private and public institutions anticipate. To protect consumers, investors, employees and others, firms and private and public institutions should regularly conduct Sludge Audits to catalogue the costs of sludge and to decide when and how to reduce it. Sludge often has costs far in excess of benefits, and it can hurt the most vulnerable members of society. [ABSTRACT FROM AUTHOR]

There can be a serious tension between the commitment to cost-benefit analysis and a realistic appreciation of the limits of official knowledge. Without significant efforts to reduce those limits, that analysis might be inadequately informed. Whenever regulators face significant informational deficits, or what is sometimes called "the knowledge problem," it is important to explore tools that take advantage of what the private sector knows; market-friendly tools, such as economic incentives, have important advantages on that count. An advanced regulatory system should also try to reduce the knowledge problem through three routes: (i) creative use of notice-and-comment rulemaking; (ii) retrospective analysis of regulations and their costs and benefits; and (iii) advance testing, as a way of informing ex ante analysis. For the future, the most promising approach is (iii). [ABSTRACT FROM AUTHOR]

Study is presented to formulate a distinctive form of paternalism, libertarian in spirit and acceptable to those who are firmly committed to freedom of choice on grounds of either autonomy or welfare. This kind of approach of libertarian paternalism would ensure freedom of choice, and will encourage private and public institutions to steer people in directions that will promote their own welfare by providing a basis for both understanding and rethinking many social practices, including those that deal with worker welfare, consumer protection and the family

With respect to questions of fact, people use heuristics--mental short-cuts, or roles of thumb, that generally work well, but that also lead to systematic errors. People use moral heuristics too--moral short-cuts, or rules of thumb, that lead to mistaken and even absurd moral judgments. These judgments are highly relevant not only to morality, but to law and politics as well. Examples are given from a number of domains, including risk regulation, punishment, reproduction and sexuality, and the act/omission distinction. In all of these contexts, rapid, intuitive judgments make a great deal of sense, but sometimes produce moral mistakes that are replicated in law and policy. One implication is that moral assessments ought not to be made by appealing to intuitions about exotic cases and problems; those intuitions are particularly unlikely to be reliable. Another implication is that some deeply held moral judgments are unsound if they are products of moral heuristics. The idea of error-prone heuristics is especially controversial in the moral domain, where agreement on the correct answer may be hard to elicit; but in many contexts, heuristics are at work and they do real damage. Moral framing effects, including those in the context of obligations to future generations, are also discussed.

Moral heuristics are pervasive, and they produce moral errors. We can identify those errors as such even if we do not endorse any contentious moral view. To accept this point, it is also unnecessary to make controversial claims about moral truth. But the notion of moral heuristics can be understood in diverse ways, and a great deal of work remains to be done in understanding the nature of moral intuitions, especially those that operate automatically and nonreflectively, and in exploring the possibility of faltering such intuitions through modest changes in context and narrative.

When policymakers focus on costs and benefits, they often find that hard questions become easy – as, for example, when the benefits clearly exceed the costs, or when the costs clearly exceed the benefits. In some cases, however, benefits or costs are difficult to quantify, perhaps because of limitations in scientific knowledge. In extreme cases, policymakers are proceeding in circumstances of uncertainty rather than risk, in the sense that they cannot assign probabilities to various outcomes. We suggest that in difficult cases in which important information is absent, it is useful for policymakers to consider a concept from poker: 'freerolls.' A freeroll exists when choosers can lose nothing from selecting an option but stand to gain something (whose magnitude may itself be unknown). In some cases, people display 'freeroll neglect.' In terms of social justice, John Rawls' defense of the difference principle is grounded in the idea that, behind the veil of ignorance, choosers have a freeroll. In terms of regulatory policy, one of the most promising defenses of the Precautionary Principle sees it as a kind of freeroll. Some responses to climate change, pandemics and financial crises can be seen as near-freerolls. Freerolls and near-freerolls must be distinguished from cases involving cumulatively high costs and also from faux freerolls, which can be found when the costs of an option are real and significant, but not visible. 'Binds' are the mirror-image of freerolls; they involve options from which people are guaranteed to lose something (of uncertain magnitude). Some regulatory options are binds, and there are faux binds as well. [ABSTRACT FROM AUTHOR]

OBITUARY: Iris Marion Young was not only an important and creative political theorist, but also a well-respected and liked colleague and teacher. She was passionate about moral and political philosophy, and argued forcefully for sex-and identity-based justice claims, incorporating them into a progressive political vision.

Peter Berkowitz, Harvard University In politics as in political science and legal scholarship, the world sometimes seems to be divided into those who think that for the sake of efficiency [...]

In recent years, there has been a great deal of discussion of the welfare effects of digital goods, including social media. A national survey, designed to monetize the benefits of a variety of social media platforms (including Facebook, Twitter, YouTube and Instagram), found a massive disparity between willingness to pay (WTP) and willingness to accept (WTA). The sheer magnitude of this disparity reflects a 'superendowment effect'. Social media may be Wasting Time Goods – goods on which people spend time, but for which they are not, on reflection, willing to pay much (if anything). It is also possible that in the context of the WTP question, people are giving protest answers, signaling their intense opposition to being asked to pay for something that they had formerly enjoyed for free. Their answers may be expressive, rather than reflective of actual welfare effects. At the same time, the WTA measure may also be expressive, a different form of protest, telling us little about the actual effects of social media on people's lives and experiences. It may greatly overstate those effects. In this context, there may well be a sharp disparity between conventional economic measures and actual effects on experienced well-being. [ABSTRACT FROM AUTHOR]

A growing body of normative work explores whether and how deference to people's choices might be reconciled with behavioral findings about human error. This work has strong implications for economic analysis of law, cost–benefit analysis, and regulatory policy. In light of behavioral findings, regulators should adopt a working presumption in favor of respect for people's self-regarding choices, but only if those choices are adequately informed and sufficiently free from behavioral biases. The working presumption should itself be rebuttable on welfare grounds, with an understanding that the ends that people choose might make their lives go less well. For example, people might die prematurely or suffer from serious illness, and what they receive in return might not (on any plausible account of welfare) be nearly enough. The underlying reason might involve a lack of information or a behavioral bias, identifiable or not, in which case intervention can fit with the working presumption, but the real problem might involve philosophical questions about the proper understanding of welfare, and about what it means for people to have a good life. [ABSTRACT FROM AUTHOR]

Disclosure mandates are pervasive. Though designed to inform consumers, such mandates may lead consumers to draw false inferences – for example, that a product is harmful when it is not. When deciding to require disclosure of an ingredient in or characteristic of a product, regulators may be motivated by evidence that the ingredient or characteristic is harmful to consumers. But they may also be motivated by a belief that consumers have a right to know what they are buying or by interest-group pressure. Consumers who misperceive the regulator's true motive, or mix of motives, will draw false inferences from the mandated disclosure. If consumers think that the disclosure is motivated by evidence of harm, when in fact it is motivated by a belief in a right to know or by interest-group pressure, then they will be inefficiently deterred from purchasing the product. We analyze this general concern about disclosure mandates. We also offer survey evidence demonstrating that the risk of false inferences is serious and real. [ABSTRACT FROM AUTHOR]

Why and when does outrage grow? This essay, based on the 2018 LSE Behavioural Public Policy Lecture delivered in February 2018, explores two potential answers. The first points to a revision or weakening of social norms, which leads people to express outrage that they had previously suppressed. The second points to a revision or weakening of social norms, which leads people to express outrage that they had not previously felt (and may or may not now feel). The intensity of outrage is often a product of what is most salient. It is also a product of 'normalization'; people compare apparently outrageous behavior to behavior falling into the same category in which it is observed, and do not compare it to other cases, which leads to predictable incoherence in judgments. These points bear on the #MeToo movement of 2017 and 2018 and the rise and fall (and rise again, and fall again) of discrimination on the basis of sex and race (and also religion and ethnicity). [ABSTRACT FROM AUTHOR]