For a number of years, those interested in behavioral economics have been exploring how recent findings about human fallibility might bear on law and public policy. There has been growing interest in various forms of paternalism — alternately described as light, soft, asymmetrical, and libertarian. For all these approaches, the unifying idea is that private and public institutions might adopt rules that steer people in directions that will make their lives go better while also maintaining freedom of choice. An example is a default rule (say, for savings or for health care) that, if unaltered, helps all or most people; another example is a cooling-off period (say, for encyclopedia sales).
Tags: default rules