Behavioral Public Choice: The Behavioral Paradox of Government Policy

42 Pages Posted: 4 Feb 2015

See all articles by W. Kip Viscusi

W. Kip Viscusi

Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics

Ted Gayer

Brookings Institution

Date Written: February 2, 2015

Abstract

Although government agencies increasingly use behavioral irrationalities as a justification for government intervention, the paradox is that these same government policies are also subject to similar behavioral inadequacies across a broad range of policies. This article develops an analysis of behavioral public choice in which we recognize that government officials are human and subject to behavioral anomalies and to public choice incentives that could further lead to welfare-reducing policies. Moreover, the existence of behavioral failures by the general public will lead to public pressures on government agencies to foster policies in response to these behavioral inadequacies. This article presents a series of policy examples indicating how government policies as well are subject to behavioral and political biases.

Keywords: behavioral economics, rationality, regulation, public choice

JEL Classification: D61, H40, K32, Q50

Suggested Citation

Viscusi, W. Kip and Gayer, Ted, Behavioral Public Choice: The Behavioral Paradox of Government Policy (February 2, 2015). Vanderbilt Law and Economics Research Paper No. 15-2. Available at SSRN: https://ssrn.com/abstract=2559408 or http://dx.doi.org/10.2139/ssrn.2559408

W. Kip Viscusi (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-343-7715 (Phone)
615-322-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vanderbilt University - Department of Economics

Box 1819 Station B
Nashville, TN 37235
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States
(615) 343-7715 (Phone)
(615) 343-5953 (Fax)

HOME PAGE: http://law.vanderbilt.edu/faculty/viscusi.htm

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

Ted Gayer

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

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