Richard H. Thaler & Cass R. Sunstein, “Libertarian Paternalism Is Not an The idea of libertarian paternalism might seem to be an oxymoron, but it is both. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN*. Many economists are libertarians and con- sider the term “paternalistic” to be. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN’. Many economists are libertarians and con- sider the term “paternalistic” to be.

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He has a choice: An obvious objection to their proposals arises, and their efforts to respond to this objection form the theoretical substance of the book. As if this were not enough, people often lack the information required for an informed choice. They answer worries that libertarian paternalism will lead to more severe restrictions by treating this complaint as an ordinary “slippery-slope” argument.

Thaler and Sunstein might respond in this way: Sometimes, though, the evidence for irrationality, taken in their economic textbook sense, is weak. Setting the default in order to exploit the default effect is a typical example of a soft paternalist policy. The American Economic Review Their escape from apparent contradiction is ingenious. Research by behavioral economists demonstrated, moreover, that firms which raised the default rate instantly and dramatically raised the contribution rates of their employees.

Libertarian paternalism – Wikipedia

He strongly prefers that payments for breakdowns be handled in advance. But not all cases are like this, as the transplants example illustrates. But, in a free society, doing so is up to you; the state may not nudge you into this sort of contract. Let us return to those who, despite the health risks, continue to smoke. Skepticism and Freedom University of Chicago Press, If people want to smoke cigarettes, to eat a lot of candy, to choose an unsuitable health care plan, or to fail to save for retirement, libertarian paternalists will not force them to do otherwise — or even make things hard for them… A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.


To return to the transplant case, if the state says to people that their organs will be taken from them unless they explicitly direct otherwise, it is claiming to set forward the terms under which people can retain control of their own bodies.

Why not allow transplants, unless someone has signed a declaration forbidding that his body be used in this way? The authors might answer that decisions on whether to restrict one’s future choices are themselves less than fully rational and informed; but to say this is merely to reiterate their original argument, and the libertarian rejoinder to it is unchanged.

Smokers, putting aside the issue of secondary smoke, do not violate others’ rights: Economics textbooks assume that people act on their preferences rationally, based on full information.

Nevertheless, a paternalist about smoking would think it justifiable forcibly to prevent people from smoking. Raising default contribution rates is also an example of asymmetric paternalism.

What they in effect are saying is that unless someone meets the textbook criteria for rationality and information, he is not really choosing in the full sense.

Unless, though, they have filled out a donor card, doctors who wish to transplant organs must secure the consent of whoever has legal custody of the body.

Loyalty program Safety culture. Further, people are often subject to so-called “framing” effects: Libertarian paternalism is a relatively weak, soft, and nonintrusive type of paternalism because choices are not blocked, fenced off, or significantly burdened. Home Mises Library Libertarian Paternalism. After all, doing so may enable them better to achieve what they “really” want — as experts, suitably instructed by Thaler and Sunstein, determine.

Grynbaum November 7, Whether or not they have ever studied economics, many people seem at least implicitly committed to the idea of homo economicusor economic man — the notion that each of us thinks and chooses unfailingly well, and thus fits within the textbook picture of human beings offered by economists.

Behavioral economists attribute this to the ” status quo bias “, the common human resistance to changing one’s behavior, combined with another common problem: Nudges, not force, are on their agenda. Countries that have an “opt-out” system for voluntary organ donation anyone who did not explicitly refuse to donate their organs in the case of accident is considered a donor experience dramatically higher levels of organ donation consent, than countries with an opt-in system.


For other uses of “soft paternalism”, see paternalism.

Libertarian paternalism

People, as their title suggests, may be subject to paternalistic “nudges,” so long as these nudges do not coerce them.

Further, they are often divided against themselves: But the real issue is not the inevitable progression of the slippery slope but the rational basis for the restriction in the first place.

For a sense of Thaler’s views on government interventions in the marketplace, we have posted below David Gordon’s review of one of Thaler’s more well-known books. Why, they ask, need one progress down it? Thaler and Sunstein have set themselves a seemingly impossible task.

It is also justifiable to nudge people to act in a “good” way, even when doing so is not for their own good. Thaler and Cass Sunstein. Given cases of this kind, their alternative ways of stating their proposal, i. Behavioral economics Social proof Default effect Libertarian paternalism Choice architecture Social engineering Design for behaviour change.

Libertarian Paternalism | Mises Institute

Nudge theory in business Loyalty program Safety culture. Paternalists maintain that it is sometimes justifiable to interfere with someone’s freedom, if doing so will promote his own good. Are not paternalists, even of the soft variety who confine their ministrations to nudges, substituting their preferences for the freely chosen decisions of others?

True enough, the authors preach a librtarian doctrine. Thaler and Sunstein do not suggest that rationality always requires suppressing kibertarian impulsive self, but often it does.

Libertarians need not deny obvious facts. It is all right thalrr render it difficult for people to make certain choices, as long as doing so does not impose substantial costs on them.