Economic Theory Lost in Translation: Will Behavioral Economics Reshape the Compelled Commercial Speech Doctrine?

Abstract

For half a century, Congress has required that tobacco companies include text-based warning labels on cigarette packages. In 2009, Congress decided that these warnings were insufficient and should be supplemented by graphic images of cigarette smoke flowing out of exposed tracheas and warnings of nicotine’s addictiveness. Congress’s decision was informed by Nobel laureate Daniel Kahneman’s research in behavioral economics, which ranks salient, emotion-evoking images as being more effective than textual statements in promoting the internalization of advertising messages. Ill-equipped to handle the First Amendment implications of this measure, courts have fumbled over the question of whether these graphic images reshape warning information into a form of speech, compelling a state-imposed ideology upon the tobacco industry.

This Article consolidates the economic and legal theory needed to properly analyze the impact of salience measures on the commercial speech doctrine. By walking through various First Amendment scenarios, this Article describes and differentiates between the two main governmental interests motivating graphic image requirements on cigarette labels: reducing smoking and informing consumers. The Article then sets up a game-theoretic model of the compelled commercial speech doctrine and uses Bayesian inference to make assumptions about how the Supreme Court would rule if it eventually rules on similar graphic images placed on cigarette labels. Solving the model by way of forward induction yields the prediction that the constitutionality of the graphic image requirements will depend on whether the images are ideologically neutral.

This Article makes three basic arguments. First, it argues that, to assess the constitutionality of the salience measure, we must first understand the economic underpinnings that motivated Congress to implement the graphic image requirements in the first place. Specifically, the measure’s constitutionality depends on whether Congress is using increased salience solely to promote effective internalization or whether it is going beyond that to compel expression of smoking is disgusting. Second, this Article contends that Daniel Kahneman’s two-system model of cognitive function should be used to make this determination. Finally, it argues that certain images attempted to manipulate consumers’ emotions to prevent rational decision-making, and that the measure should therefore have been held unconstitutional.