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The Curious Case of Choice Architect: Examining the Philosophical Inconsistencies of Libertarian Paternalism

Author

Listed:
  • Kuriakose, Francis
  • Kylasam Iyer, Deepa

Abstract

Classical economics works on the principle that individuals are rational and make decisions to maximize their self interest. However in real situations, individuals face a conflict between rational and irrational selves leading to decision making that does not leave them better off. Libertarian paternalism proposes a solution to this rationality problem in an individual by conceiving a choice architect. Choice architect is a third party capable of arriving at what a perfectly rational choice would be and ‘nudges’ an individual towards making that choice. Libertarian paternalists claim that choice architect does not interfere with the freedom of an individual because the choices he offers are easily reversible, i.e, an individual can reject it at any given point in time. Libertarian Paternalism seems to offer the third way between absolute autonomy of individual choice (libertarianism) and third party intervention (paternalism). This paper argues that the conception of a choice architect comes out of a hasty commitment to reconciling libertarianism and paternalism by placing perfect rationality and autonomy in two separate individuals in the case of a single decision making process. The paper proposes alternatives to confront the rationality problem.

Suggested Citation

  • Kuriakose, Francis & Kylasam Iyer, Deepa, 2017. "The Curious Case of Choice Architect: Examining the Philosophical Inconsistencies of Libertarian Paternalism," MPRA Paper 84842, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:84842
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    References listed on IDEAS

    as
    1. Druckman, James N, 2001. "Using Credible Advice to Overcome Framing Effects," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 62-82, April.
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    More about this item

    Keywords

    Libertarian paternalism; Nudging; Behavioural economics; Choice architect; Rationality; Autonomy;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D0 - Microeconomics - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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