Libertarian Paternalism, Path Dependence, and Temporary Law

Abstract

The recent wave of behavioral economics has led some theorists to advocate the possibility of “libertarian paternalism,” in which regulators designing institutions permit significant individual choice but nonetheless use default rules to “nudge” cognitively biased individuals toward particular salutary choices. In this article, we add the possibility of a different kind of nudge: temporary law. Temporary law is less intrusive than permanent regulation, and is particularly attractive in situations in which we believe that path dependence has produced the status quo. We illustrate the argument with the example of smoking bans, and provide an empirical case study of an actual temporary smoking ban in Champaign, Illinois.