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Nudging, calculation, and utopia

Author

Listed:
  • Chris Berg

    (School of Economics Finance and Marketing, RMIT University, Melbourne, Australia)

  • Sinclair Davidson

    (School of Economics Finance and Marketing, RMIT University, Melbourne, Australia)

Abstract

In this paper we provide a critique of behavioural economics or nudging as a basis for practical policy making purposes. While behavioural economics operates as a plausible critique of standard neoclassical economics, it suffers from the same methodological errors inherent within that tradition. Just as socialist planners lacked the information (and incentives) to allocate resources across an entire economy and economists lack the information to optimally correct externalities, so too libertarian paternalists lack the information to second guess consumer preferences and opportunity costs.

Suggested Citation

  • Chris Berg & Sinclair Davidson, 2017. "Nudging, calculation, and utopia," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(S), pages 49-52, November.
    • Handle: RePEc:beh:jbepv1:v:1:y:2017:i:s:p:49-52
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    References listed on IDEAS

    as
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    3. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107695122, October.
    4. Steven Horwitz, 2016. "Behavioural Economics: A Virginia Political Economy Perspective," Economic Affairs, Wiley Blackwell, vol. 36(3), pages 273-281, October.
    5. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107015432, October.
    6. Judith Mehta, 2013. "The discourse of bounded rationality in academic and policy arenas: pathologising the errant consumer," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(6), pages 1243-1261.
    Full references (including those not matched with items on IDEAS)

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