Nudge vs. boost: agency dynamics under "libertarian paternalism'"Working paper (2015)
Thaler and Sunstein’s (2008) "nudges" are policies designed to enlist individuals’ cognitive biases to achieve desired outcomes. A core assumption is that nudges advance the interests of the nudged individuals. We analyze a dynamic model in which policy maker and individual preferences are not necessarily aligned. Moreover, an available alternative is to "boost" individuals to avoid their bias once and for all. We demonstrate that nudges have option value -- although training may be in the immediate best interests of both policy maker and individual, the former may aver and, thereby, leave open the possibility of nudging in the future.
Publication DateWinter December, 2015
Citation InformationMichael D Ryall and Ralph Hertwig. "Nudge vs. boost: agency dynamics under "libertarian paternalism'"" Working paper (2015)
Available at: http://works.bepress.com/michael_ryall/22/