The Curious Case of Choice Architect: Examining the Philosophical Inconsistencies of Libertarian Paternalism

10 Pages Posted: 3 Apr 2017

See all articles by Francis Kuriakose

Francis Kuriakose

Erasmus University Rotterdam

Deepa Iyer

University of Cambridge

Date Written: April 3, 2017

Abstract

Classical economics works on the principle that individuals are rational and make decisions to maximize their self interest. However in real situations, individuals face a conflict between rational and irrational selves leading to decision making that does not leave them better off. Libertarian paternalism proposes a solution to this rationality problem in an individual by conceiving a choice architect. Choice architect is a third party capable of arriving at what a perfectly rational choice would be and ‘nudges’ an individual towards making that choice. Libertarian paternalists claim that choice architect does not interfere with the freedom of an individual because the choices he offers are easily reversible, i.e, an individual can reject it at any given point in time. Libertarian Paternalism seems to offer the third way between absolute autonomy of individual choice (libertarianism) and third party intervention (paternalism). This paper argues that the conception of a choice architect comes out of a hasty commitment to reconciling libertarianism and paternalism by placing perfect rationality and autonomy in two separate individuals in the case of a single decision making process. The paper proposes alternatives to confront the rationality problem.

Keywords: Libertarian paternalism, Nudging, Behavioural economics, Choice architect, Rationality, Autonomy

JEL Classification: A12, D03, D81, D83

Suggested Citation

Kuriakose, Francis and Iyer, Deepa, The Curious Case of Choice Architect: Examining the Philosophical Inconsistencies of Libertarian Paternalism (April 3, 2017). Available at SSRN: https://ssrn.com/abstract=2945308 or http://dx.doi.org/10.2139/ssrn.2945308

Francis Kuriakose (Contact Author)

Erasmus University Rotterdam ( email )

Burgemeester Oudlaan 50
Rotterdam, 3062
Netherlands

Deepa Iyer

University of Cambridge ( email )

Cambridge
United Kingdom

HOME PAGE: http://www.cam.ac.uk

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