How do you balance autonomy and paternalism in using behavioral economics?

1 What is autonomy?

Autonomy is the ability and right of individuals to make their own decisions and act according to their own values and interests, without external coercion or manipulation. Autonomy is often seen as a core value of liberal democracy and a source of human dignity and well-being. However, autonomy also implies responsibility and accountability for one's actions and consequences, and may require some level of rationality, information, and self-control.

2 What is paternalism?

Paternalism is the attitude or action of authorities or experts who intervene in people's decisions and behavior for their own good, even if they do not consent or agree. Paternalism can take different forms, such as coercion, restriction, regulation, or manipulation, depending on the degree of force and transparency involved. Paternalism can be justified by appealing to the welfare, rights, or interests of individuals or society, especially when people are irrational, ignorant, or vulnerable.

3 How does behavioral economics challenge autonomy?

Behavioral economics reveals that people often deviate from rationality and self-interest, and are influenced by various cognitive biases, heuristics, emotions, and social norms. For example, people may suffer from present bias, which means they discount the future and prefer immediate gratification over long-term goals. They may also exhibit status quo bias, which means they stick to the default option and avoid change, even if it is suboptimal. These behavioral anomalies can lead to suboptimal or harmful outcomes, such as under-saving for retirement, overeating, or smoking.

4 How does behavioral economics enable paternalism?

Behavioral economics provides tools and techniques for policymakers and experts to influence people's decisions and behavior in subtle and non-coercive ways, by designing the choice architecture or the context in which choices are made. This approach is called nudging, and it involves changing the default option, framing the information, providing feedback, or creating incentives or social norms that guide people towards the desired outcome. For example, automatically enrolling workers in a pension plan, displaying calorie counts on menus, or showing how much energy one saves compared to the average can nudge people to save more, eat less, or conserve more.

5 What are the benefits of using behavioral economics?

Using behavioral economics can have many benefits for individuals and society, such as improving welfare, efficiency, and equity. By nudging people to make better choices, behavioral economics can help them overcome their own biases and weaknesses, and achieve their goals and aspirations. It can also help address collective action problems, such as climate change or public health, by aligning individual and social interests. Moreover, using behavioral economics can be more cost-effective and less intrusive than other policy instruments, such as taxes, subsidies, or bans.

6 What are the risks of using behavioral economics?

Using behavioral economics can also have some risks and drawbacks, such as undermining autonomy, accountability, and democracy. By nudging people to make certain choices, behavioral economics can limit their freedom and agency, and manipulate their preferences and behavior. It can also reduce their responsibility and awareness of the consequences of their actions, and create moral hazards or unintended effects. Furthermore, using behavioral economics can raise questions about the legitimacy and transparency of the policymakers and experts who design and implement the nudges, and their accountability to the public and the law.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?