Hausman, D. M., & Welch, B. (2010). Debate: To Nudge or Not to Nudge*. Journal of Political Philosophy, 18(1), 123-136.
In this article Hausman and Welch critique and further explore the concepts of “libertarian paternalism” as described by Richard Thaler and Cass Sunstein in their book Nudge. To do this, they sought to address the core concepts covered by Thaler and Sunstein.
Firstly, the authors clarify the definitions given by Thaler and Sunstein. Libertarian paternalism attempts to influence decisions that will be of benefit to individuals without affecting their liberty. A nudge is defined as a way of influencing choice, without limiting the choice set. Thaler and Sunstein also recognise the imperfections of individual decision making. Secondly, the authors critique Thaler and Sunstein’s definition of paternalism, arguing that an agent’s consent to receive benefits are irrelevant. Paternalism, therefore, can be used to benefit agents against their will, without influencing their choice. The authors are also critical of the position that advice and rational persuasion (that aim to benefit agents) is paternalistic in nature. Paternalism seeks to constrain an agent’s decisions, substituted by a different one. However, providing information and giving advice accepts that agents are fully competent decision makers. The authors argue that one of the key distinguishing factors of paternalism is the act of coercion.
Finally, the authors recognise the weaknesses and limitations of using libertarian paternalism to influence behaviour. There is a danger that influencing behaviour threatens the control that agents have over their own decisions and could be vulnerable to abuse. While Thaler and Sunstein propose that libertarian paternalism is relatively weak and nonintrusive, the authors argue that it is in fact alarmingly invasive. In the article, the authors establish four claims where they recognise the inherent flaws of libertarian paternalism, seek to reconcile these flaws, highlight the extent to which libertarian paternalism should be used and assert that rational persuasion (persuasion through facts and valid arguments) is far more ethical and effective as it fully respects the sovereignty of the individual over their decisions.
This article, when positioned amongst broader literature, reads more as a book review, rather than offering any real concrete contribution to the field. It does however build upon Thaler and Sunstein’s view of nudging and liberal paternalism and is educational in that it deepened my understanding of paternalism.
John, P., Smith, G., & Stoker, G. (2009). Nudge nudge, think think: two strategies for changing civic behaviour. The Political Quarterly, 80(3), 361-370.
Similar to Hausman and Welch, the authors of this article investigate nudging with a different approach. A contrast is given between two competing strategies for change: ‘nudging’ (construction of choice architecture) versus the thinking (collective thinking resulting in a better understanding of problems solutions). Whilst at first these two competing strategies may appear to be incompatible, there may be a way to reconcile them.
Nudging, a by-product of bounded rationality and behavioural economics, has been used by policy makers as a defence against citizens who are highly susceptible to cognitive limitations. Nudging seeks to mitigate the negative effects that bounded rationality has on undermining or distorting beneficial change messages.
The authors contrast this with the ‘think’ strategy, where they question the political legitimacy of nudging in a democratic society. For the authors, political legitimacy rests on public deliberation between free and equal agents. A benefit of the ‘think’ strategy is that true public deliberation has an educational effect, increasing both the knowledge and understanding that citizens have regarding consequences. Furthermore, ‘think’ strategies can mobilise citizens, particularly marginalised groups, to actively engage in conversation about public issues leading to self fulfilling solutions. The emergence of this new conceptualisation of change has resulted in a rise of interest amongst policy makers in new forms of civic engagements.
Both of these strategies are not without their limitations. Nudging fails to address fundamental problems regarding issues and thus the outcomes are generally modest. Allowing citizens to freely deliberate on issues however, is time consuming and only truly effective if the conditions for deliberation are satisfactory, another challenge altogether. The authors believe that both strategies can be effective tools for policy makers and are best used in tandem with one another (even suggesting that nudging can lay the foundations for deliberation).
This article, when positioned amongst broader literature, provides a strong alternative to a widely used political strategy and offers a compromise that I like to think of as ‘soft nudging’. It thus successfully makes a positive contribution to the field.
Simon, H. A. (1972). Theories of bounded rationality. Decision and organization, 1(1), 161-176.
This article explores further the concept of bounded rationality and rational behaviour. Theories of bounded rationality argue that cognition can be limited by incomplete information regarding alternative choices. Furthermore, rationality can be bounded by actor’s forgoing the cost of searching for optimal outcomes by settling on a sub-optimal outcome; thus becoming a theory of optimal approximation.
The authors consider the decision making dynamics of chess, offering an alternative approach to rationality. Studies have shown that strong chess players rarely consider all possible strategies before making a move, rather they only generate and examine a relatively small number of possible moves, choosing the first move they regard as satisfactory. The game of chess is able to merge the three limits of perfect rationality together: that is the uncertainty over the consequences of alternatives, incomplete information on alternatives and computation disrupted by complexity. The authors thus argue that, regardless of the position a player is in, they will always be limited by their own rationality.
The paper then, interestingly, attempts to use theories of bounded rationality to better understand design. The theory of design, the authors argue, can be assimilated to a satisficing theory of rational choice. Whenever complete designs are reached, they are not evaluated by comparison with alternatives, but rather are exclusively compared to the standards which are defined by the designer’s aspirational levels. Satisficing is therefore an integral part of the search process. This model can also be applied to management science, where possible plans are gradually built up, with many alternatives being immediately dismissed throughout. To mitigate this limit to rationality, management science utilises simulation to explore a limited set of alternatives. However, even this, lacks the ability to discover new alternatives.
This article, when positioned amongst broader literature, offers a refreshingly new contribution to the field. Design has rarely been analysed with a rational decision-making model, however this paper demonstrates how bounded-rationality findings relating to chess can be effectively overlaid with those of design. I found this incredibly interesting and intellectually refreshing.
Akerlof, G. A., & Dickens, W. T. (1982). The economic consequences of cognitive dissonance. The American economic review, 307-319.
This paper presents an example of how economists can take the behavioural models of the social sciences (namely cognitive dissonance) and incorporate them into their own assumptions of behaviour (that agents are rational actors).
There are three basic premises of economic cognitive dissonance: confirmation biases, personal belief distortion and the persistence of chosen beliefs (despite their veracity). To confirm these premises, the authors illustrate a number of examples in the workplace which highlight the inherent flaws which are present in day-to-day cognition. For example, workers will believe in the safety of their workplace despite present dangers, to ease anxiety and caution; running the risk of injury should their judgements fail. In this example, the authors still maintain that the workers are rational; but only to the extent that their belief structure is the result of a subconscious cost-benefit analysis.
Social psychology, which is based upon the theory of cognitive consistency, offers psychological evidence of cognitive dissonance. Agents self-identify themselves as ‘smart’ and ‘nice’, and any information that conflicts with this identification is ignored, rejected or supplemented for another belief that fits within this self-identity. Agents rarely recognise these errors, as recognition itself would again be in conflict with the agent’s ego. Bayesian decision theory is offered as a critique of this theory, however the authors look to the results of psychological experiments analysing cognitive dissonance to discount this critique; arguing that the evidence supports the notion that it is in fact personal beliefs that affect decisions, more than available information.
With these findings in mind, the authors have constructed a decision model which modifies the traditional model of rational decision making and demonstrates the resultant opportunities and consequences. This paper approached the economics of ‘irrational behaviour’ from a different perspective as that of Gary Becker, who holds that irrational behaviour is a random and spontaneous deviation from economic rationality.
This article, when positioned amongst broader literature, establishes a clear model and provides practical outcomes. The model is robust and well thought out, allowing for an easy understanding of the relevant concepts. However, where this article falls short, is the confidence with which they present this model. In my personal opinion, matters of economic rationality are far too complex to be explained by a single model of rational decision making.
Edlin, A., Gelman, A., & Kaplan, N. (2007). Voting as a rational choice why and how people vote to improve the well-being of others. Rationality and society, 19(3), 293-314.
Keeping with the theme of rationality, the authors of this article have taken a different approach, arguing that actor’s make rational choices when voting. The paper seeks to demonstrate that social preferences are dominant over selfish preferences when at the ballot, that there is a feedback mechanism in rational socially motivated voting which effectively stabilises reasonable voter turnout and that there is a link between the ‘rational social-utility model of voter turnout’ out and the results of socially motivated ‘vote choice’ studies.
The authors argue against the traditional rational-choice models which assume individuals act selfishly, instead arguing that the rationality assumption can be separated from the selfishness assumption thus revealing that voting can be a rational act and that agents vote according to the expected social consequences. Additionally, agents perceive voting as a potential contribution to the greater good. The result of this theory is that vote choice models should work with social rather than selfish utility functions. By separating social and selfish preferences, which have traditionally thought of as being linked, it becomes clear that voting in large populations is perfectly rational. This is evidenced by small-scale contributions to political campaigns, active participation in opinion polls, increased voter turnout in relation to size and anticipated closeness of an election which are seemingly irrational phenomena considering the scope and significance of a single vote.
Another proposition made by the authors is that agents decide who to vote for based on social consideration. This is evidenced by ‘un-loyal’ strategic voting, voting based on issues which have no direct significance to the voter, but perhaps most importantly on surveys of voter motivations. The findings of these surveys suggest that voters will often voter’s preferences are strongly aligned with their views of what would be most beneficial to the country, rather than their own situation. It can thus be argued that voters think in terms of group and national benefits.
This article, when positioned amongst broader literature, makes some controversial claims against the generally held consensus of voter rationality. This paper provides a strong case for this new theory, however there was very little critical attempt to recognise the limits and weaknesses of this new social-benefit model.
Hooghe, L. (2007). What Drives Euroskepticism?. European Union Politics, 8(1), 5-12.
This article examines and attempts to explain public scepticism surrounding the European Union (coined Euroskepticism). Since 1990, there has been an increasing move to make European Union decision making more democratic with increased oversight of national parliaments, greater powers for the European Parliament, majority voting within the Council, and an increase in EU referendums. This has sought to bring to an end to an era where European elites bargained treaties in the shadow of an apathetic and generally approving public. Hooghe seeks to understand what drives European Union decision making in the modern era, as well as Euroskepticism. This move was embodied in the rejection of the European Constitutional Treaty in 2005, forcing a rethink of the permissive consensus that the people in charge of the European Union were above accountability. To this day, the matter of European integration has been strictly labelled as a contentious issue.
Hooghe begins his examination by establishing two, diametrically opposed theories of European Union politics. One theory is a bottom up view of preference formation. In this argument, voter’s preferences provide a structure of incentives for party position in the context of electoral competition. Whichever party can best capitalise on voter preferences will be better situated to acquire political power. In the context of the European Union, policy makers must gauge the public mood on European integration and make decisions from that.
Another theory is the top down approach, whereby political parties cue and directly influence the opinions and decisions of the public. Political parties, according to this theory, hold the ideological maps to help navigate highly technical and multi-faceted issues (such as those facing European integration). The public can rarely grasp the complexities of these issues, and thus look to political parties for guidance.
Hooghe, in his analysis, agrees with the bottom up approach to explain Euroskepticism. Euroskepticism, then, is best understood as a rational response by citizens (and thus political parties) for whom centralized European Union power is a threat to their own personal interests, not as a result of dissent of the political system.
This article, when positioned amongst broader literature, can perhaps explain the recent rise in ‘leave’ sentimentality which has gripped Europe; the result of personal interests (perhaps those of safety or job security) being threatened by the Europe Union. This immediate application of the article to a phenomena facing the world today forced me to reflect upon and challenge my own perspectives regarding Euroskepticism (that it was the result of a top down system).
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