Mercatus Center Senior Research Fellow Shruti Rajagopalan recently spoke with Mario Rizzo and Glen Whitman about their new book, Escaping Paternalism: Rationality, Behavioral Economics, and Public Policy. Rizzo is an associate professor of economics, director of the Program on the Foundations of the Market Economy, and co-director of the Classical Liberal Institute at New York University. Whitman is professor of economics at California State University, Northridge. This transcript, as well as the audio of the conversation, has been slightly edited for clarity. SHRUTI RAJAGOPALAN: Welcome to Mercatus Policy Download. My name is Shruti Rajagopalan, and I’m a senior research fellow at the Mercatus Center at […]
  • poVoq
    0•1 year ago

    I disagree with this article. Sensible defaults via choice architecture make sense. Sure, in theory people might make different decisions if they would look into the topic in detail and research the various options. But there is only so much time in a day, and you have to keep the mental load in mind.

    The more privileged your economic and social position in society is the more time/nerves you have to make well informed decisions about such topics. But try that, juggling two jobs and a kid as a single mom…

    In absence of sensible defaults engineered in a choice architecture by experts that do not have a direct economic incentive to exploit people for personal gain, other actors step in that do have direct financial incentives. These then offer “convenient” choices to people too busy/stressed out to deal with the details themselves, ultimately exploiting them in the process. Insurance companies are a classical example of this.