A Little Give and Take

Adam Oliver

doi:10.31389/lseppr.36

Abstract

In this article, I contend that the behavioural affects that tend to be labelled as errors by most behavioural economists, and as such have served as the justification for a paternalistic direction in behavioural public policy (i.e., policy intervention that aims to protect people from imposing harms on themselves), are in an ecological sense not errors at all. While acknowledging that modern societies are very different from the types of societies in which these affects evolved, I argue that we still cannot conclude that attempts to modify people’s choices in accordance with these so-called errors will improve the lives of those targeted for behaviour change, particularly given the varied and multifarious private objectives and desires that people pursue. Where people are imposing no substantive harms on others, I maintain that policy makers should restrict themselves to protecting and fostering the fundamental motivational force of reciprocity, which serves to benefit the group (which could be the whole society) and, by extension, most of the people who comprise the group, irrespective of their own personal desires in life. However, when one party to any particular exchange actively uses the behavioural affects to benefit themselves and imposes harms on the other party to the exchange, the concept of a free and fair reciprocal exchange has been violated. In these circumstances, there is an intellectual justification to introduce behavioural-informed regulations—a form of negative reciprocity—against activities that impose unacceptable harms on others. My arguments thus call for behavioural public policy to preserve individual autonomy within an overarching policy framework that nurtures reciprocity whilst at the same time regulates against behavioural-informed practices that impose substantive harms on others, rather than focusing on reducing the harms that people supposedly impose on themselves. This would be a major switch in emphasis for one of the most important developments in public policy in modern times. JEL Codes: D91, Z18

Highlights

Adam OliverI contend that the behavioural affects that tend to be labelled as errors by most behavioural economists, and as such have served as the justification for a paternalistic direction in behavioural public policy (i.e., policy intervention that aims to protect people from imposing harms on themselves), are in an ecological sense not errors at all
The motivational force of reciprocity—of responding in kind to good and bad intentions and/or actions—can and should be nurtured by policy makers to help individuals pursue their own personal desires and to help public sector groupings achieve their collective objectives [1]
The urge to act reciprocally lies deep within the human psyche and evolved because the long-term self-interest of individuals is often furthered by acting in a way that brings forth benefits and protections to the group as a whole. Out of this evolutionary process arose a social norm that favours conditional cooperation and that justifies the punishment of transgressors

Summary

Adam Oliver

I contend that the behavioural affects that tend to be labelled as errors by most behavioural economists, and as such have served as the justification for a paternalistic direction in behavioural public policy (i.e., policy intervention that aims to protect people from imposing harms on themselves), are in an ecological sense not errors at all. My arguments call for behavioural public policy to preserve individual autonomy within an overarching policy framework that nurtures reciprocity whilst at the same time regulates against behavioural-informed practices that impose substantive harms on others, rather than focusing on reducing the harms that people supposedly impose on themselves. This would be a major switch in emphasis for one of the most important developments in public policy in modern times

Introduction

High Probability Risk Aversion

Findings

Passes II III IV Finish