The Problematic Welfare Standards of Behavioral Paternalism

Review of Philosophy and Psychology, Forthcoming

29 Pages Posted: 7 Feb 2015

See all articles by Douglas Glen Whitman

Douglas Glen Whitman

California State University, Northridge - Department of Economics

Mario J. Rizzo

New York University

Date Written: February 5, 2015

Abstract

Behavioral paternalism raises deep concerns that do not arise in traditional welfare economics. These concerns stem from behavioral paternalism’s acceptance of the defining axioms of neoclassical rationality for normative purposes, despite having rejected them as positive descriptions of reality. We argue (1) that behavioral paternalists have indeed accepted neoclassical rationality axioms as a welfare standard; (2) that economists historically adopted these axioms not for their normative plausibility, but for their usefulness in formal and theoretical modeling; (3) that broadly rational individuals might fail to satisfy the axioms for various reasons, making them unpersuasive as normative criteria; and (4) that even if their violation did constitute irrationality, that would not justify paternalists’ choosing among inconsistent preferences to define an individual’s “true” preferences.

Keywords: behavioral economics, rationality, paternalism, transitivity, completeness

JEL Classification: D03, D60, B41

Suggested Citation

Whitman, Douglas Glen and Rizzo, Mario J., The Problematic Welfare Standards of Behavioral Paternalism (February 5, 2015). Review of Philosophy and Psychology, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2560976

Douglas Glen Whitman (Contact Author)

California State University, Northridge - Department of Economics ( email )

18111 Nordhoff Street
Northridge, CA 91330
United States
818-677-4542 (Phone)

Mario J. Rizzo

New York University ( email )

Department of Economics
19 W, 4th Street
New York, NY 10012
United States
212-998-8932 (Phone)
212-995-4186 (Fax)

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