Nudges, preferences and competences

A critique of both neoclassical and behavioral economics

Bibliographic Data

ID13109165
AuthorsRichard A Epstein (0000-0001-6624-7311, corresponding author)
Year2025
Volume9
Issue3
Pages545-559
Publication date2025-05-06
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueBehavioural Public Policy (JOURNAL)
Journal identifiersISSN: 2398-063X • E-ISSN: 2398-0648
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/bpp.2024.54
OpenAlexW4410136349
LanguageEN
References cited12

For all their differences, the two rival theories of human behavior have many unfortunate similarities. Standard rational choice theory posits that individuals use rational techniques to pick ends that meet their set of private preferences. Modern theories of behavioral economics point to systematic deviations from those principles. Both approaches assume that all preferences are individually based. However, the evolutionary principle of inclusive fitness insists that in family situations, it is the welfare of the unit, not of any of single individual, that explains various forms of natural love and affection that arise because of the interdependence of − and the redistribution of − wealth it requires. Likewise, both standard theories ignore variations in tastes and in competence levels that allow for gains from trade across competence levels. This paper then reinterprets the common treatment of nudges and the various legal doctrines dealing with disabilities, product liability, and firm structure where the standard assumptions of uniform behavior miss the salient features of human behavior and social interactions

Behavioral economics · Behavioural economics · Economics · Microeconomics · Neoclassical economics · Nudge theory · Positive economics · Decision-Making and Behavioral Economics · Economic theories and models · Economic Theory and Institutions · Psychology · Social Psychology

Tools

Open DOIOpen Access