libertarian paternalism

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Nudge blog note: Last night’s Republican debate prompted Richard Thaler to weigh in on Rick Perry’s handling of an HPV vaccine executive order, but not the policy itself. Also, Thaler recently started tweeting. Follow him.

By Richard Thaler

In the Republican Presidential debate last night at the Reagan library a question emerged about Rick Perry’s now famous 2007 executive order requiring all Texas girls to receive a vaccine against the human papillomavirus (HPV) before entering the sixth grade. Perry said during the debate that his order was not a “mandate,” which is grounds for treason in Republican circles, since there was an opt-out provision. (The issue became moot since the Legislature over-ruled him and the shmandate was never imposed.)

These kinds of issues are well known to nudgers. There is not a bright line distinguishing a mandate from a nudge; the question becomes one of costs. In the case of a default option, the question is how costly is it to opt out. As we have often said, the ideal nudge has “one click” as the cost of opting out. And the button to press for that click should be easy to find. Mandates are also not all equally offensive. In Romneycare, for example, there was a fine for not having health insurance, but the fine was pretty small — around a couple hundred dollars — at least initially.

If it is sufficiently onerous to opt out of a default rule then it effectively becomes a mandate. Conversely, if the fine for violating a mandate is small and/or unlikely to be imposed, the mandate is rather mild. (Consider the mandate to clean up dog poop. Have you ever heard of anyone being busted for this?)

The actual facts of the Perry inoculation mandate are summarized well by Politifact Texas. They assigned a “mostly false” verdict to Perry’s claim that his policy was not a mandate. This verdict was based on the fact that parents would have to request and file a conscientious objection affidavit form, the same form that is used if parents want to opt out of other health mandates such vaccines for measles or polio. Apparently few parents elect to fill out this form, though the reasons are unclear.

We don’t know whether the form is hard to get, hard to fill out, or whether most folks want their kids to get their shots. I conjecture that one reason might be the name given to the form. I am guessing that the term “conscientious objector” is not highly regarded in Texas. A “hell no, I ain’t goin’ along with this” form might have gotten more take-up. Politifact also notes that Catholic schools do not accept these forms, presumably because the Church is in favor of strict mandates.

Politifact’s verdict might be a bit harsh. On the Nudge-Mandate continuum, Perry’s policy was somewhere in the middle. There is an opt-out, but it is clearly more costly than one click. Still, I am guessing that Mr. Perry will not be endorsing libertarian paternalism any time soon.

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Over at Cato Unbound Glen Whitman worries about “the rise of the new paternalism,” with a slippery slope argument.

Richard Thaler responds.

There are a lot of things out there to be afraid of, and there seem to be phobias named for each one. For example, you may not be familiar with bathmophobia, which is an abnormal and persistent fear of stairs or steep slopes, or a fear of falling. Less well known is “nudgephobia,” also known as the Whitman-Rizzo syndrome, which is the fear of being gently nudged down a slope while standing on a completely flat surface. This phobia is sometimes associated with other disorders such as the fear of being given helpful directions when lost; the fear of obtaining reliable medical advice when sick; and, in rare cases, some have even suffered from a fear of having someone recommend a book or movie that you will really like.

Full response is here.

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America’s Future Foundation, an think tank comprised of libertarian and conservative members, is sponsoring a panel discussion of Nudge in Washington D.C. on February 18th at 6:30 p.m. Cost: Free for organization members, $5 for non-members.

Many view Libertarian Paternalism as oxymoronic. Despite the name, can this idea offer a “third way” and improve our decision making processes in a beneficial way?  Or, is Libertarian Paternalism another way for “choice architects” to manipulate individuals into behaving in ways they view as correct and beneficial, while restricting our individual ability to choose?  Understanding the policy implications of this idea is especially relevant as Cass Sunstein was recently tapped to head the White House Office of Information and Regulatory Affairs in the Obama Administration.

The full slate of panelists will be announced soon. More information about the event can be found here.

Addendum: An audio tape of the event is here.

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Frederick the Great of Prussia saw the potato’s potential to help feed his nation and lower the price of bread, but faced the challenge of overcoming the people’s prejudice against the plant. When he issued a 1774 order for his subjects to grow potatoes as protection against famine, the town of Kolberg replied: “The things have neither smell nor taste, not even the dogs will eat them, so what use are they to us?” Trying a less direct approach to encourage his subjects to begin planting potatoes, Frederick used a bit of reverse psychology: he planted a royal field of potato plants and stationed a heavy guard to protect this field from thieves. Nearby peasants naturally assumed that anything worth guarding was worth stealing, and so snuck into the field and snatched the plants for their home gardens. Of course, this was entirely in line with Frederick’s wishes.

From this history of the potato via Rory Sutherland, who submits it as an “interesting example of libertarian paternalism. A worse king would have mandated the consumption of potatoes, or at least their cultivation.” Sutherland will have a nudge for readers on Friday. Check back then.

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Michael Schrage of MIT wishes Amazon.com’s recommendation choice architecture could automatically distinguish between books he buys, books he browses, and books he buys as gifts for other people.

Lengthy interview with Richard Thaler in Fairfield Weekly by a former Ph.D. student of his, Phil Maymin. Thaler took the World’s Smallest Political Quiz and came up as a “libertarian.” But he corrected the record and called himself a “libertarian paternalist.” Thaler also explains the origins of the phrase libertarian paternalism.

The history of this phrase is that I was presenting a paper here at the University of Chicago on the “Save More Tomorrow” program, and a guy in the Economics Department was my discussant and he accused me of being a paternalist. Which as you know is the biggest insult that you can accuse anybody of being at the University of Chicago. And I said, “Well, I guess, but there’s no coercion here, so, maybe you should call me a libertarian paternalist.” That’s where it started.

David Leonhardt on how loss aversion affects our sense of inflation.

Dan Goldstein recalls a stickk.com-esque commitment strategy for finishing his dissertation. The ending is great.

I am reminded of the time I was a postdoc at Columbia University, on the job market, and deep in a publish-or-perish the phase of my career. I instituted a similar (though lower-tech) mechanism. My rule was that if I didn’t write a certain number of pages each day, I would lose five dollars. I think I lost about $60 on the scheme, though it did land me a job I love.

I remember being seriously conflicted about whom to give the money to if I procrastinated. I felt that if I gave it to a good cause, I would be continually justifying my procrastination as charitable. I felt that if I gave it to a bad cause, that would be evil. I also feared that I would start justifying my procrastination by telling myself the bad cause isn’t so bad. (Sound far-fetched? The idea that we might infer our preferences from our actions is a key, if not field-defining, idea from social psychology.)

In the end, I chose to leave the money on a seat on the New York subway. Maybe a good person would find it, maybe a bad person would find it, all I was certain of was regretting my procrastination. Given that you’re not evil, if you found $5 on the 1/9 train around 2005, I hope that it inched you closer to your goals.

Amol Agrawal thinks a restaurant in Powai is using behavioral economics to jack up his bill.

Paul Sweeney sends an email about an anti-nudge at his gym. What awaits members, courtesy of the gym’s owners, after they leave the dressing room following healthy workouts? Snickers bars on the counter.

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Josh Patashnik at The Plank comments on two Missouri proposals meant to discourage abortions.

The first is a ballot-initiative requiring doctors to psychologically evaluate women seeking abortions to assess whether their decisions have been influenced by external pressure. Doctors would ask: “Is someone else encouraging you to have this abortion? Do you want this abortion to satisfy your own needs or are you looking to do this to please someone else?”

The second is a recently passed state house bill, also in Missouri, requiring doctors to offer women seeking abortions a chance to view an ultrasound and feel the fetus’s heartbeat. Similar measures have been passed in other states.

Continue reading the post here.

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