31 Pages Posted: 14 Feb 2013 Last revised: 24 Apr 2014
Date Written: February 13, 2013
Laws can be hard to pass and easy to ignore. Regulators are increasingly turning to alternatives to law to influence citizen behavior. This Essay compares three methods that have particularly captured the imagination of scholars and officials in recent years. Much has been written about each method in isolation. This Essay considers them together in order to generate a novel normative insight about the nature of regulatory choice.
The first alternative method, known colloquially as architecture or “code,” occurs where regulators change a physical or digital environment to make undesirable conduct difficult. Speed bumps provide a classic example. The second method, libertarian paternalism or “nudging,” refers to leveraging human bias to guide us toward better policy outcomes. For instance, the state might attempt to increase organ donation by moving to an opt-out system because people disproportionally favor the status quo. Finally, mandatory disclosure or “notice” works by requiring organizations to provide individuals with information about their practices or products. Examples include everything from product warnings to privacy policies.
These methods feel more distinct than they actually are. The timely example of graphic warnings on cigarettes illustrates how hard it can be to characterize a given intervention, and why categories matter. The issue — which the Supreme Court seems likely to hear — turns on whether the Food and Drug Administration intended for the warnings to change smoker behavior, or merely to provide information. Indeed, whether regulators employ code, nudge, or notice, there is almost always the deeper choice between helping citizens and hindering them. This Essay argues that regulators should choose “facilitation” over “friction” where possible, especially in the absence of the usual safeguards that accompany law.
Keywords: architecture, code, libertarian paternalism, behavioral economics, nudge, mandatory disclosure, notice
Suggested Citation: Suggested Citation
Calo, Ryan, Code, Nudge, or Notice? (February 13, 2013). Iowa Law Review, vol. 99, no. 2, pp. 773-802 (2014); University of Washington School of Law Research Paper No. 2013-04. Available at SSRN: https://ssrn.com/abstract=2217013