Behavioral Economics and Public Policy 102: Beyond Nudging
Saurabh Bhargava, George Loewenstein
American Economic Review · 2015 · Volume 105 · Issue 5
Abstract
Policymakers have recently embraced Behavioral Economics as an alternative approach which recognizes the limits and consequences of human decision-making. Early applications of BE ("nudges") produced notable successes and helped to set the stage for more aggressive applications aimed at the deeper causes of policy problems. We contend that policies that aspire to simplify products and incentives, rather than choice environments, aggressively protect consumers from behavioral exploitation, and leverage BE to enhance the design and implementation of traditional policy instruments offer solutions commensurate with contemporary challenges. Case studies in health insurance, privacy, and climate change illustrate the application of these ideas.
Keywords
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, Positive Analysis of Policy Formulation and Implementation, Behavioral Macroeconomics, Policy Objectives, Policy Designs and Consistency, Policy Coordination, Health Insurance, Public and Private, Climate, Natural Disasters and Their Management, Global Warming
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