Copyright (c) 2009 All rights reserved. http://works.bepress.com/mario_rizzo Recent documents in Mario Rizzo en-us Thu, 12 Nov 2009 23:24:12 PST 3600 http://works.bepress.com/mario_rizzo/30 http://works.bepress.com/mario_rizzo/30 Wed, 11 Nov 2009 15:50:38 PST The "new paternalism" claims that careful policy interventions can help people make better decisions in terms of their own welfare, with only mild or nonexistent infringement of personal autonomy and choice. This claim to moderation is not sustainable. Applying the insights of the modern literature on slippery slopes to new paternalist policies suggests that such policies are particularly vulnerable to expansion. This is true even if policymakers are fully rational. More importantly, the slippery-slope potential is especially great if policymakers are not fully rational, but instead share the behavioral and cognitive biases attributed to the people their policies are supposed to help. Accepting the new paternalist approach creates a risk of accepting, in the long run, greater restrictions on individual autonomy than have been heretofore acknowledged. Mario J. Rizzo Law and Economics Behavioral Law and Economics Paternalism Slippery Slope Analysis http://works.bepress.com/mario_rizzo/29 http://works.bepress.com/mario_rizzo/29 Wed, 14 Oct 2009 17:12:04 PDT The "new paternalism" is a set of policy prescriptions based on recent findings in behavioral economics whose purpose is to help individuals overcome a wide variety of behavior and cognitive biases. According to its proponents, it does not aim at replacing the preferences of individuals with those of the paternalist but rather to uncover the "true" preferences of individuals, that is, the preferences they would have if they had perfect knowledge, unlimited cognitive abilities and no lack of willpower. The purpose of this Article is to show that new paternalist policies founder on the shoals of a profound knowledge problem revealed in Friedrich Hayek's famous critique of central planning. Feasible policies require not only accurate scientific knowledge but also accurate knowledge of "the particular circumstances of time and place" that constitute the local and personal knowledge of individuals. This knowledge is not accessible by paternalists. This Article takes the findings of the behavioral economic and psychological literature seriously and shows that new paternalist policies can reliably increase welfare only if they take account of individual circumstances. These circumstances include the extent of biases, the existence and degree of self-debiasing, the interaction of different biases, and the unraveling of self-regulation due to paternalist policies. New paternalists must also deal with the indeterminacy of true preferences in the context of conflicting preferences within individuals. We do not argue that individuals always make welfare-enhancing choices. Instead, we argue that despite individuals' mistakes, the paternalist does not know better in the concrete sense of what would be welfare-enhancing in particular circumstances and at particular times. Thus the new paternalist project fails to attain its self-imposed goals. Mario J. Rizzo Law and Economics Behavioral Law and Economics Paternalism http://works.bepress.com/mario_rizzo/28 http://works.bepress.com/mario_rizzo/28 Tue, 21 Jul 2009 07:19:28 PDT An analysis of the Great Recession by a microeconomist who sees inherent deficiencies in the macroeconomic way of thinking. Mario J. Rizzo Austrian Economics http://works.bepress.com/mario_rizzo/27 http://works.bepress.com/mario_rizzo/27 Mon, 20 Jul 2009 21:10:39 PDT These are the references for the article," Austrian Economics: Recent Work." Mario J. Rizzo Austrian Economics http://works.bepress.com/mario_rizzo/26 http://works.bepress.com/mario_rizzo/26 Mon, 20 Jul 2009 21:03:54 PDT A survey of work in Austrian economics over the past twenty years. Mario J. Rizzo Austrian Economics http://works.bepress.com/mario_rizzo/25 http://works.bepress.com/mario_rizzo/25 Fri, 13 Feb 2009 18:18:10 PST An analysis of the deficiencies of the stimulus pakage of February, 2009 from the point of view of a microeconomist. Mario J. Rizzo Macroeconomics http://works.bepress.com/mario_rizzo/23 http://works.bepress.com/mario_rizzo/23 Fri, 16 May 2008 13:04:08 PDT This paper is an attempt to "update" and extend David Hume's moral psychology by demonstrating its consistency with the findings of construal level theory as recently developed by Trope, Liberman and others. Following Hume, justice is an abstract virtue the practice of which which does not give the individual positive psychological feedback in all cases. A single act of justice may be perceived as contrary to the public or private interest. It often takes a cognitive act of abstract construal to see and to appreciate the value of justice. Beneficence, on the other hand, is a concrete virtue. Its psychological core is the sympathy generated in the agent by the pleasure or relief of suffering the patient experiences in the particular, often immediate, circumstances that present themselves. Construal level theory suggests there is often a "bias" in favor of approving acts of beneficence relative to approving acts of justice. Such a bias has social costs because less justice and more beneficence will tend to be produced than is socially optimal. This is true at the level of inter-individual behavior, in the legislative process, and in the judicial process. Mario J. Rizzo Law, Economics and Philosophy Behavioral Law and Economics http://works.bepress.com/mario_rizzo/22 http://works.bepress.com/mario_rizzo/22 Wed, 16 Apr 2008 15:26:02 PDT This is an analysis of the uses of the equilibrium concept in the works of Ludwig von Mises, Friedrich Hayek and Ludwig Lachmann. It is claimed that for Mises the concept of equilibrium is an analytical tool or construct. Hayek and Lachmann thought of equilibrium in more realistic terms but differed as to the extent to which the real world approximates an equilibrium. Mario J. Rizzo Economics and Methodology http://works.bepress.com/mario_rizzo/20 http://works.bepress.com/mario_rizzo/20 Tue, 15 Jan 2008 14:08:40 PST The syllabus of a course "The Economics of Welfare, Justice and Ethics" I am giiving at the graduate level at NYU. The course emphasizes conceptual depth rather than formalism. Mario J. Rizzo Economics and Philosophy Course Syllabus http://works.bepress.com/mario_rizzo/19 http://works.bepress.com/mario_rizzo/19 Thu, 01 Nov 2007 15:48:14 PDT This is a collection of articles and comments on those articles deriving from a conference at New York University. Contributors include Sir john Hicks, Harold Demsetz, Israel Kirzner, Murray Rothbard. Ludwig Lachmann, Roger Garrison and many others. The full text of the book is available for downloading. Mario J. Rizzo Economics and Methodology