The John M. Olin Center

Paper Abstract

1026. Cass R. Sunstein, Back to Mill? Behavioral Welfare Economics, 01/2020.

Abstract: A growing body of normative work, going under the name of “behavioral welfare economics,” explores how deference to people’s choices might be reconciled with behavioral findings about human error. This work has important implication for economic analysis of law. The best approach adopts a working presumption in favor of respect for those choices, so long as they are adequately informed and sufficiently free from behavioral biases. For purposes of law, it is most helpful to emphasize that people may choose the wrong means to promote their own ends; in principle, that possibility may legitimate nudges, incentives, or mandates. But for both empirical and philosophical reasons, those interested in law and policy, or in welfare itself, should be cautious about making strong normative claims about whether people choose the right ends. Behavioral welfare economics, and behaviorally informed analysts of law, should be committed to the working presumption, with humility and aware of the inevitability of taking a stand on some fundamental philosophical issues.

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