Abstract

Heterogeneous beliefs and decision processes generate positive externalities for social and economic systems, analogous to biodiversity in biological systems. Although some aspects of biodiversity (e.g., pests, parasites and bacteria) can lead to ecological and economic problems, biodiversity provides flows of beneficial ecological services and is widely regarded as a valuable natural resource and informational asset, whose value increases as we learn more and science progresses (Wilson in Bioscience 35(11):700–706, 1985). Heterogeneous beliefs and decision processes (and heterogeneous behaviors they generate) similarly provide flows of beneficial economic services. Behavioral diversity should therefore be seen as a natural resource and informational asset likely to improve human wellbeing in surprising ways in the future. Paternalistic policies motivated by the goal of “correcting” allegedly suboptimal beliefs and behavior that diverge from expert recommendations jeopardize behavioral diversity at a substantial cost to social welfare. The risk of encroaching on this beneficial behavioral heterogeneity with policies that aim to induce behavioral and belief monocultures should be included explicitly as costs when evaluating nudges and other paternalistic policies.