Regulating Internalities

12 Pages Posted: 26 May 2015

See all articles by Hunt Allcott

Hunt Allcott

New York University (NYU)

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2015

Abstract

This paper offers a framework for regulating internalities. Using a simple economic model, we provide four principles for designing and evaluating behaviorally-motivated policy. We then outline rules for determining which contexts reliably reflect true preferences and discuss empirical strategies for measuring internalities. As a case study, we focus on energy efficiency policy, including Corporate Average Fuel Economy (CAFE) standards and appliance and lighting energy efficiency standards.

Suggested Citation

Allcott, Hunt and Sunstein, Cass R., Regulating Internalities (May 2015). NBER Working Paper No. w21187. Available at SSRN: https://ssrn.com/abstract=2610464

Hunt Allcott (Contact Author)

New York University (NYU) ( email )

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Cass R. Sunstein

Harvard Law School ( email )

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Harvard University - Harvard Kennedy School (HKS) ( email )

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