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'Better Off, as Judged by Themselves': Bounded Rationality and Nudging

Forthcoming, Routledge Handbook on Bounded Rationality, Riccardo Viale, Editor

9 Pages Posted: 26 Oct 2017 Last revised: 17 Nov 2017

Cass R. Sunstein

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

Date Written: October 25, 2017

Abstract

Many nudges are designed to make people better off, as judged by themselves. This criterion, meant to ensure that nudges will increase people’s welfare, contains some ambiguity. It is useful to distinguish among three categories of cases: (1) those in which choosers have clear antecedent preferences, and nudges help them to satisfy those preferences (often by increasing “navigability”); (2) those in which choosers face a self-control problem, and nudges help them to overcome that problem; and (3) those in which choosers would be content with the outcomes produced by two or more nudges, or in which ex post preferences are endogenous to nudges, so that without additional clarification or work, the “as judged by themselves” criterion does identify a unique solution for choice architects. Category (1) is self-evidently large. Because many people agree that they suffer self-control problems, category (2) is large as well. Cases that fall in category (3) create special challenges, which may lead us to make direct inquiries into welfare or to explore what informed, active choosers typically select.

Suggested Citation

Sunstein, Cass R., 'Better Off, as Judged by Themselves': Bounded Rationality and Nudging (October 25, 2017). Forthcoming, Routledge Handbook on Bounded Rationality, Riccardo Viale, Editor. Available at SSRN: https://ssrn.com/abstract=3059310

Cass Sunstein (Contact Author)

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

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