A powerful critique of nudge theory and the paternalist policies of behavioral economics, and an argument for a more inclusive form of rationality.

What should be the ‘informational base’ of welfare economics if one takes the insights from behavioral economics seriously? Sugden proposes individuals’ sets of opportunities. This paper discusses...

Behavioral paternalism raises deep concerns that do not arise in traditional welfare economics. These concerns stem from behavioral paternalism’s acceptance of the defining axioms of neoclassical rationality for normative purposes, despite having rejected them as positive descriptions of reality. We argue that behavioral paternalists have indeed accepted neoclassical rationality axioms as a welfare standard; that economists historically adopted these axioms not for their normative plausibility, but for their usefulness in formal and theoretical modeling; that broadly rational individuals might fail to (...) satisfy the axioms for various reasons, making them unpersuasive as normative criteria; and that even if their violation did constitute irrationality, that would not justify paternalists’ choosing among inconsistent preferences to define an individual’s “true” preferences. (shrink)

Taxation is more than one thing. Taxes can be levied in various ways on various things, with varying effects on a culture and an economy, and raising different challenges of justification.

Both behavioral and standard neoclassical economists place a heavy emphasis on the consistency of preferences. In particular, transitive preferences are considered a desideratum. This paper attempts to show that consistency at the level of individual choice may be pragmatically irrelevant. Consistently following an environmentally adapted rule can result in intransitive preferences without negative consequences for individual or social goals. I give three examples of this. Social scientists should look at intransitivity of choices as a challenge to offer better explanations rather (...) than as a normative defect. (shrink)

Nous proposons dans cet article un développement de l’idée proposée par F.A. Hayek selon laquelle l’ordre du droit coutumier est un ordre d’action, une coordination des plans individuels dans un système d’échange régi par ce droit. Cette conception s’oppose à l’idée suivant laquelle l’ordre légal doit être avant tout fondé sur la cohérence logique des concepts et doctrines de ce droit. Un exemple important de cette approche est celui de la structure de maximisation des richesses de William Landes et Richard (...) Posner. L’article montre que la cohérence logique n’est ni nécessaire ni suffisante pour un ordre de plans ou pour une “cohérence praxéologique”. Nous défendons la position du droit coutumier classique suivant laquelle le droit se développe en accord avec les anticipations marginales des parties en présence. Dans la mesure où le droit se développe dans ce sens, il est possible d’approcher des objectifs jumelés du droit coutumier : la certitude relative et l’adaptation aux circonstances particulières.This article is a development of the idea, proposed by F.A. Hayek, that the order of common law is an order of actions, that is, a coordination of the plans of individuals in a system of exchanges governed by that law. This is in contrast to the idea that legal order is primarily to be found in the logical coherence of the law’s doctrines and concepts. The article shows that logical coherence is neither necessary nor sufficient for an order of plans, or “praxeological coherence”. It argues for the classic common law position that the law develops in accordance with the marginal expectations of the relevant parties. To the extent that the law develops in this way, it is possible for the twin goals of the common law to be approximated: relative certainty and adaptation to novel circumstances. (shrink)