Showing papers by "Cass R. Sunstein published in 2015"

Nudges Do Not Undermine Human Agency

Abstract: Some people believe that nudges undermine human agency, but with appropriate nudges, neither agency nor consumer freedom is at risk. On the contrary, nudges can promote both goals. In some contexts, they are indispensable. There is no opposition between education on the one hand and nudges on the other. Many nudges are educative. Even when they are not, they can complement, and not displace, consumer education.

Nudges, Agency, and Abstraction: A Reply to Critics

Abstract: This essay has three general themes. The first involves the claim that nudging threatens human agency. My basic response is that human agency is fully retained (because nudges do not compromise freedom of choice) and that agency is always exercised in the context of some kind of choice architecture. The second theme involves the importance of having a sufficiently capacious sense of the category of nudges, and a full appreciation of the differences among them. Some nudges either enlist or combat behavioral biases but others do not, and even among those that do enlist or combat such biases, there are significant differences. The third general theme is the need to bring various concerns (including ethical ones) in close contact with particular examples. A legitimate point about default rules may not apply to warnings or reminders. An ethical objection to the use of social norms may not apply to information disclosure. Here as elsewhere, abstraction can be a trap. We continue to learn about the relevant ethical issues, about likely public reactions to nudging, and about differences across cultures and nations. Future progress will depend on a high level of concreteness, perhaps especially in dealing with the vexing problem of time-inconsistency.

Nudging and Choice Architecture: Ethical Considerations

Abstract: Is nudging unethical? Is choice architecture a problem for a free society? This essay defends seven propositions: (1) It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do customs and traditions; so do spontaneous orders and invisible hands. The private sector inevitably nudges, as does the government. It is reasonable to worry about nudges by government and to object to particular nudges, but not to nudging in general. (2) In this context, ethical abstractions (for example, about autonomy, dignity, manipulation, and democratic self-government) can create serious confusion. To make progress, those abstractions must be brought into contact with concrete practices. Nudging and choice architecture take highly diverse forms, and the force of an ethical objection depends on the specific form. (3) If welfare is our guide, much nudging is actually required on ethical grounds, even if it comes from government. (4) If autonomy is our guide, much nudging is also required on ethical grounds, in part because some nudges actually promote autonomy, in part because some nudges enable people to devote their limited time and attention to their most important concerns. (5) Choice architecture should not, and need not, compromise either dignity or self-government, but it is important to see that imaginable forms could do both. It follows that when they come from government, choice architecture and nudges should not be immune from a burden of justification, which they might not be able to overcome. (6) Some nudges are objectionable because the choice architect has illicit ends. When the ends are legitimate, and when nudges are fully transparent and subject to public scrutiny, a convincing ethical objection is less likely to be available. (7) There is ample room for ethical objections in the case of well-motivated but manipulative interventions, certainly if people have not consented to them; such nudges can undermine autonomy and dignity. It follows that both the concept and the practice of manipulation deserve careful attention. The concept of manipulation has a core and a periphery; some interventions fit within the core, others within the periphery, and others outside of both.

Fifty Shades of Manipulation

Abstract: Both marketers and politicians are often accused of “manipulation”, but the term is far from self-defining. A statement or action can be said to be manipulative if it does not suciently engage or appeal to people’s capacity for reflective and deliberative choice. One problem with manipulation, thus understood, is that it fails to respect people’s autonomy and is an aront to their dignity. Another problem is that if they are products of manipulation, people’s choices might fail to promote their own welfare, and might instead promote the welfare of the manipulator. To that extent, the central objection to manipulation is rooted in a version of John Stuart Mill’s Harm Principle: People know what is in their best interests and should have a (manipulationfree) opportunity to make that decision. On welfarist grounds, the norm against manipulation can be seen as a kind of heuristic, one that generally works well, but that can also lead to serious errors, at least when the manipulator is both informed and genuinely interested in the welfare of the chooser. For politics and law, a pervasive puzzle is why manipulation is rarely policed. The simplest answer is that manipulation has so many shades, and in a social order that values-free markets and consumer sovereignty, it is exceptionally dicult to regulate manipulation as such. Those who sell products are often engaged in at least arguable forms of manipulation. But as the manipulator’s motives become more self-interested or venal, and as eorts to bypass people’s deliberative capacities become more successful, the ethical objections to manipulation may be very forceful, and the argument for a legal response is fortified. The analysis of manipulation bears on emerging free speech issues raised by compelled disclosure, especially in the context of graphic health warnings. It can also help orient the regulation of financial products, where manipulation of consumer choices is an evident but rarely explicit concern.

Choosing Not to Choose: Understanding the Value of Choice

Abstract: Our ability to make choices is fundamental to our sense of ourselves as human beings, and essential to the political values of freedom-protecting nations. Whom we love; where we work; how we spend our time; what we buy; such choices define us in the eyes of ourselves and others, and much blood and ink has been spilt to establish and protect our rights to make them freely. Choice can also be a burden. Our cognitive capacity to research and make the best decisions is limited, so every active choice comes at a cost. In modern life the requirement to make active choices can often be overwhelming. So, across broad areas of our lives, from health plans to energy suppliers, many of us choose not to choose. By following our default options, we save ourselves the costs of making active choices. By setting those options, governments and corporations dictate the outcomes for when we decide by default. This is among the most significant ways in which they effect social change, yet we are just beginning to understand the power and impact of default rules. Many central questions remain unanswered: When should governments set such defaults, and when should they insist on active choices? How should such defaults be made? What makes some defaults successful while others fail? Cass R. Sunstein has long been at the forefront of developing public policy and regulation to use government power to encourage people to make better decisions. In this major new book, Choosing Not to Choose, he presents his most complete argument yet for how we should understand the value of choice, and when and how we should enable people to choose not to choose. The onset of big data gives corporations and governments the power to make ever more sophisticated decisions on our behalf, defaulting us to buy the goods we predictably want, or vote for the parties and policies we predictably support. As consumers we are starting to embrace the benefits this can bring. But should we? What will be the long-term effects of limiting our active choices on our agency? And can such personalized defaults be imported from the marketplace to politics and the law? Confronting the challenging future of data-driven decision-making, Sunstein presents a manifesto for how personalized defaults should be used to enhance, rather than restrict, our freedom and well-being.

Do People Like Nudges

Abstract: In recent years, there has been a great deal of debate about the ethical questions associated with “nudges,” understood as approaches that steer people in certain directions while maintaining their freedom of choice. Evidence about people’s views cannot resolve the ethical questions, but in democratic societies (and nondemocratic ones as well), those views will inevitably affect what public officials are willing to do. Existing evidence, including a nationally representative survey, supports six general conclusions. First, there is widespread support for nudges of the kind that democratic societies have adopted or seriously considered in the recent past; surprisingly, that support can be found across partisan lines. While people tend to have serious objections to mandates as such, they do not have similar objections to nudges. Second, the support evaporates when people suspect the motivations of those who are engaged in nudging, and when they fear that because of inertia and inattention, citizens might end up with outcomes that are inconsistent with their interests or their values. Third, there appears to be somewhat greater support for nudges that appeal to conscious, deliberative thinking than for nudges that affect subconscious or unconscious processing, though this conclusion is highly qualified, and there can be widespread approval of the latter as well (especially if they are meant to combat self-control problems). Fourth, people’s assessment of nudges in general will be greatly affected by the political valence of the particular nudges that they have in mind (or that are brought to their minds). Fifth, transparency about nudging will not, in general, reduce the effectiveness of nudges, because most nudges are already transparent, and because people will not, in general, rebel against nudges. Sixth, there is preliminary but suggestive evidence of potential “reactance” against certain nudges.

Libertarian Paternalism Is Not an Oxymoron

Abstract: The idea of libertarian paternalism might seem to be an oxymoron, but it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice. Often people's preferences are ill-formed, and their choices will inevitably be influenced by default rules, framing effects, and starting points. In these circumstances, a form of paternalism cannot be avoided. Equipped with an understanding of behavioral findings of bounded rationality and bounded self-control, libertarian paternalists should attempt to steer people's choices in welfare-promoting directions without eliminating freedom of choice. It is also possible to show how a libertarian paternalist might select among the possible options and to assess how much choice to offer. Examples are given from many areas, including savings behavior, labor law, and consumer protection.

Behavioural economics, consumption and environmental protection

Abstract: Behavioral economists have shown that consumers may disregard the long-term, display unrealistic optimism, ignore shrouded attributes, procrastinate, make mistaken judgments about probability, and suffer from “internalities,” which occur when people make decisions that hurt their future selves. Moreover, choice architecture, understood as the social background, is always present, and it can have major consequences for both consumption decisions and environmental outcomes. Small changes in the underlying architecture may have a large impact on consumer behavior, potentially even larger than that of significant economic incentives. Such changes may involve disclosure, warnings, default rules, increased salience, and use of social norms. In the domain of environmental protection, non-price interventions, preserving freedom of choice, have considerable potential.

The Principle of the Malevolent Hiding Hand; or, the Planning Fallacy Writ Large

Abstract: We identify and document a new principle of economic behavior: the principle of the Malevolent Hiding Hand. In a famous discussion, Albert Hirschman celebrated the Hiding Hand, which he saw as a benevolent mechanism by which unrealistically optimistic planners embark on unexpectedly challenging plans, only to be rescued by human ingenuity, which they could not anticipate, but which ultimately led to success, principally in the form of unexpectedly high net benefits. Studying eleven projects, Hirschman suggested that the Hiding Hand is a general phenomenon. But the Benevolent Hiding Hand has an evil twin, the Malevolent Hiding Hand, which blinds excessively optimistic planners not only to unexpectedly high costs but also to unexpectedly low net benefits. Studying a much larger sample than Hirschman did, we find that the Malevolent Hiding Hand is common and that the phenomenon that Hirschman identified is rare. This sobering finding suggests that Hirschman's phenomenon is a special case; it attests to the pervasiveness of the planning fallacy, writ very large. One implication involves the continuing need for unbiased cost-benefit analyses and other economic decision support tools; another is that such tools might sometimes prove unreliable.

Institutional Flip-Flops

Abstract: Many people vigorously defend particular institutional judgments on such issues as the filibuster, recess appointments, executive privilege, federalism, and the role of the courts. These judgments are defended publicly with great intensity and conviction, but some of them turn out to be exceedingly fragile, in the sense that their advocates are prepared to change their positions as soon as their ideological commitments cut in the other direction. For example, institutional flip-flops can be found when Democratic officials, fiercely protective of the filibuster when the President is a Republican, end up rejecting the filibuster when the President is a Democrat. Other flip-flops seem to occur when Supreme Court justices, generally insistent on the need for deference to the political process, show no such deference in particular contexts. Our primary explanation is that many institutional flip-flops are a product of “merits bias,” a form of motivated reasoning through which short-term political commitments make complex and controversial institutional judgments seem self-evident (thus rendering those judgments vulnerable when short-term political commitments cut the other way). We offer evidence to support the claim that merits bias plays a significant role. At the same time, many institutional judgments are essentially opportunistic and rhetorical, and others are a product of the need for compromise within multimember groups (including courts). Judges might join opinions with which they do not entirely agree, and the consequence can be a degree of institutional flip-flopping. Importantly, some apparent flip-flops are a result of learning, as, for example, when a period of experience with a powerful president, or a powerful Supreme Court, leads people to favor constraints. In principle, institutional flip-flops should be reduced or prevented through the adoption of some kind of veil of ignorance. But in the relevant contexts, the idea of a veil runs into severe normative, conceptual, and empirical problems, in part because the veil might deprive agents of indispensable information about the likely effects of institutional arrangements. We explore how these problems might be overcome.

Does Active Choosing Promote Green Energy Use? Experimental Evidence

Abstract: Many officials have been considering whether it is possible or desirable to use choice architecture to increase use of environmentally friendly (“green”) products and activities. The right approach could produce significant environmental benefits, including large reductions in greenhouse gas emissions and better air quality. This Article presents new data from an online experiment (N=1,245) in which participants were asked questions about hypothetical green energy programs. The central finding is that active choosing had larger effects than green energy defaults (automatic enrollment in green energy), apparently because of the interaction between people’s feelings of guilt and their feelings of reactance. This finding is driven principally by the fact that when green energy costs more, there is a significant increase in opt-outs from green defaults, whereas with active choosing, green energy retains considerable appeal even when it costs more.More specifically, we report four principal findings. First, forcing participants to make an active choice between a green energy provider and a standard energy provider led to higher enrollment in the green program than did either green energy defaults or standard energy defaults. Second, active choosing caused participants to feel more guilty about not enrolling in the green energy program than did either green energy defaults or standard energy defaults; the level of guilt was positively related to the probability of enrolling. Third, respondents were less likely to approve of the green energy default than of the standard energy default, but only when green energy cost extra, which suggests reactance towards green defaults when enrollment means additional private costs. Fourth, respondents appeared to have inferred that green energy automatically would come at a higher cost and/or be of worse quality than less environmentally friendly energy. These findings raise important questions both for future research and for policymaking. If they reflect real-world behavior, they suggest the potentially large effects of active choosing — perhaps larger, in some cases, than those of green energy defaults.

Regulation As Delegation

Abstract: In diverse areas – from retirement savings, to fuel economy, to prescription drugs, to consumer credit, to food and beverage consumption – government makes personal decisions for us or helps us make what it sees as better decisions. In other words, government serves as our agent. Understood in light of Principal-Agent Theory (PAT) and Behavioral Principal-Agent Theory (BPAT), a great deal of modern regulation can be helpfully evaluated as a hypothetical delegation. Shifting from personal decisions to public goods problems, we introduce the idea of reverse delegation, with the government as principal and the individuals as agents.

The Principle of the Malevolent Hiding Hand; or, the Planning Fallacy Writ Large

Abstract: We identify and document a new principle of economic behavior: the principle of the Malevolent Hiding Hand. In a famous discussion, Albert Hirschman celebrated the Hiding Hand, which he saw as a benevolent mechanism by which unrealistically optimistic planners embark on unexpectedly challenging plans, only to be rescued by human ingenuity, which they could not anticipate, but which ultimately led to success, principally in the form of unexpectedly high net benefits. Studying eleven projects, Hirschman suggested that the Hiding Hand is a general phenomenon. But the Benevolent Hiding Hand has an evil twin, the Malevolent Hiding Hand, which blinds excessively optimistic planners not only to unexpectedly high costs but also to unexpectedly low net benefits. Studying a much larger sample than Hirschman did, we find that the Malevolent Hiding Hand is common and that the phenomenon that Hirschman identified is rare. This sobering finding suggests that Hirschman’s phenomenon is a special case; it attests to the pervasiveness of the planning fallacy, writ very large. One implication involves the continuing need to de-bias decisions and decision support tools like cost-benefit analysis; another is that accountability for decision makers, planners, and forecasters is required for such de-biasing to be effective and lasting.

The Limits of Quantification

Abstract: The problem of nonquantifiability is a recurrent one in both public policy and ordinary life. Much of the time, we cannot quantify the benefits of potential courses of action, or the costs, or both, and we must nonetheless decided whether and how to proceed. Under existing Executive Orders, agencies are generally required to quantify both benefits and costs, and (to the extent permitted by law) to show that the former justify the latter. But agencies are also permitted to consider apparently nonquantifiable factors, such as human dignity and fairness, and also to consider factors that are not quantifiable because of the limits of existing knowledge. When quantification is impossible, agencies should engage in “breakeven analysis,” by which they explore how high the nonquantifiable benefits would have to be in order for the benefits to justify the costs. Breakeven analysis can be used and potentially disciplined in three different ways. (1) Sometimes agencies are able to identity lower or upper bounds, either through point estimates or through an assessment of expected value. (2) Agencies can often make progress by exploring comparison cases in which relevant values have already been assigned (such as for a statistical life). (3) When agencies cannot identify lower or upper bounds, and when helpful comparisons are unavailable, breakeven analysis requires agencies to identify what information is missing and to specify the conditions under which benefits would justify costs (“conditional justification”). In admittedly rare cases, regulators, no less than individuals, might have to “pick” or instead to “opt.”

Unanimity and Disagreement on the Supreme Court

Abstract: In 2013, the Supreme Court showed an unusually high rate of unanimous decisions—the highest, in fact, since 1940. This increase in unanimity, long favored by Chief Justice John Roberts, places a spotlight on an insufficiently appreciated fact: in 1941, the Supreme Court experienced a radical transformation. Almost immediately, it changed from a court that had operated by consensus, with very few separate opinions, into something closer to nine separate law offices, with a large number of dissenting opinions and concurrences and with a significant rate of 5-4 divisions. Remarkably, the patterns established in the early 1800s continued until 1941, and the patterns established in the early 1940s have persisted to the present day. The transformation of 1941 appears to be attributable, in significant part, to the leadership style of Chief Justice Harlan Fiske Stone, who had no aversion to separate opinions and split decisions, and who was a frequent dissenter himself. The transformation offers general lessons not only about consensus and dissent within courts, but also about broader relationships among leaders, personnel, path dependence, prevailing norms, and the Court’s future. With respect to group behavior, it suggests the possibility of multiple equilibria: with small differences in leadership style and prevailing norms, the level of publicly expressed dissent can either grow or wither. With respect to the normative issues, the standard arguments in favor of a higher level of consensus within the Court—pointing to the values of legitimacy, stability, and minimalism—rest on fragile empirical foundations. It is true that a badly fractured Supreme Court can create uncertainty, and that internal divisions have costs as well as benefits, but there is no sufficient reason to hope for a return to the pre-1941 patterns.

Cost-Benefit Analysis, Who's Your Daddy?

Abstract: If policymakers could measure the actual welfare effects of regulations, and if they had a properly capacious sense of welfare, they would not need to resort to cost-benefit analysis, which gives undue weight to some values and insufficient weight to others. Surveys of self-reported well-being provide valuable information, but it is not yet possible to “map” regulatory consequences onto well-being scales. It follows that at the present time, self-reported well-being cannot be used to assess the welfare effects of regulations. Nonetheless, greatly improved understandings are inevitable, and current findings with respect to reported well-being – above all the serious adverse effects of unemployment – deserve to play a role in regulatory policymaking.

Regulation as Delegation

Abstract: In diverse areas—from retirement savings, to fuel economy, to prescription drugs, to consumer credit, to food and beverage consumption—government makes personal decisions for us or helps us make what it sees as better decisions. In other words, government serves as our agent. Understood in light of Principal-Agent Theory and Behavioral Principal-Agent Theory, a great deal of modern regulation can be helpfully evaluated as a hypothetical delegation. Shifting frompersonal decisions to public goods problems,we introduce the idea of reverse delegation, with the government as principal and the individuals as agents. In diverse areas—from retirement savings, to consumer credit, to prescription drug use, to fuel economy and energy efficiency rules, to tobacco consumption, to food and beverage consumption—government makes decisions for us or endeavors to help us make better decisions. In other words, government serves as our agent. Principal-Agent Theory (PAT), broadly applied in economics and political science, can serve as a useful framework for considering the optimal scope and nature of this assistance that our agent, the government, provides. It is quite common to talk about government as the agent of the People in a democratic society (Ackerman 1993). Our focus is not on the People, but rather on an individual person. Accordingly, we are thinking about personal decisions—decisions whose primary effect is on a single principal, an * Professor of Law and Economics, Harvard Law School, 1525 Massachusetts Avenue, Cambridge, MA 02138, E-mail: bargill@law.harvard.edu ** Robert Walmsley University Professor, Harvard Law School. We are grateful to Meirav Furth and Lisa Marrone for excellent research assistance. For helpful comments and discussions, we thank John Beshears, Ryan Bubb, Jacob Gersen, David Laibson, Oliver Hart, Daryl Levinson, and Matthew Stephenson. We are especially grateful to the editors of the JLA and to the referee for their comments and suggestions. 1 For a critical review, see Vermeule (2015). PAT has also been used in political science to characterize and analyze relationships between different government actors, e.g., President and administrative agencies or Congress and administrative agencies (See: Cook & Wood 1989; Gersen 2010). The Author 2015. Published by Oxford University Press on behalf of The John M. Olin Center for Law, Economics and Business at Harvard Law School. This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited. For commercial re-use, please contact journals.permissions@oup.com doi:10.1093/jla/lav005 individual. To this extent, we are excluding cases in which people’s decisions affect others. This is not to say that these personal decisions do not have external effects. Often they do. When people eat unhealthy food, they might affect others as well, especially if they become sick. Whenever nations have welfare systems, making sure that people are healthy, save enough, and borrow prudently may prevent third-party effects. But our focus in this article is on the well-being of the individual, seen as principal. Our central claim here is that read in light of PAT, a great deal of modern regulation can be understood and evaluated as a hypothetical delegation, through which sensible principals delegate authority to those who can make decisions on their behalf. This claim helps cast a fresh light on some objections to apparent paternalism—as, for example, where government requires people to obtain a prescription before using certain medicines, or forbids workers from running certain risks in the workplace. The use of PAT helps to discipline discussions that might otherwise be far too abstract. Adding a behavioral lens, Behavioral PAT (BPAT) helpfully enriches the basic analysis, suggesting that boundedly rational principals will be prone to both insufficient and excessive delegation. One of our principal goals is to enlist PAT and BPAT to distinguish among several distinctive kinds of hypothetical delegations, involving information, default rules, incentives, precommitments, mandates, and prohibitions. Focusing on the benefits and costs of delegation, which depend on its type, we identify the circumstances in which one or another approach makes sense. In the domain of personal decisions, we argue, it is helpful to think about the individual as principal and the government as agent. A different set of regulatory problems—public goods problems—can be conceptualized as a reverse delegation, with the government as principal and the individuals as agents. Here the government-principal, as representative of the People, sets a public objective—a clean, sustainable environment, financial stability, higher educational attainment—and enlists individuals-agents to help attain this objective. Our central argument is that the idea of regulation-as-delegation provides a useful frame for the evaluation and design of regulation. It brings to the fore 2 Saul Levmore’s work (2014a,b) on regulation responding to internalities overlaps with our “personal decisions.” Like us, Levmore writes of individuals soliciting the help of government in dealing with their internalities problems. 3 At the same time, the issue of third-party effects has to be investigated, rather than asserted, when people run risks. For example, premature mortality might reduce, rather than increase, costs for the welfare system, taken as a whole. 4 A behavioral lens has been added to PAT in other contexts (See: Gomez-Mejia & Wiseman 1998; Pepper 2015; see also: Levmore 2014a,b). 2 ~ Bar-Gill and Sunstein: Regulation as Delegation

The Most Knowledgeable Branch

Abstract: In the modern era, the executive branch has extraordinary information-gathering advantages over the legislative and judicial branches. As a result, it will often know immeasurably more than they do, both on domestic issues and on foreign affairs. In general, it also has a strong system of internal checks and balances, reducing (though certainly not eliminating) the risk of factual error. Because the executive is the most knowledgeable branch, it often makes sense, within constitutional boundaries, to give it considerable discretion in both domestic and foreign affairs, and to grant it considerable (though hardly unlimited) deference when it exercises that discretion. Both legislators and judges tend to be insufficiently aware of their epistemic disadvantages. The argument for restricting executive discretion depends on suspicion about the biases and motivations of the most knowledgeable branch and about its failure to give sufficient respect to liberty, and an associated fear of some form of “groupthink,” usually in the form of group polarization. But it is hazardous to invoke that suspicion as a basis for confining the authority of those who know most. These points are illustrated with close reference to the debate over the Department of Transportation’s rear visibility rule, proposed in 2010 and finalized in 2014.

On Interesting Policymakers

Abstract: If a nation created a Council of Psychological Science Advisers, what would it do? The closest analogy in the United States, of course, is the Council of Economic Advisers (CEA), whose advice often matters a great deal. The reason is not typically that the CEA offers interesting or novel academic findings. It is that public officials want to solve concrete policy problems, and the CEA (and other economists, found throughout the national government) can help them to do so. Suppose that the President of the United States wants his advisors to decide whether to adopt a “cash for clunkers” program, by which the government provides money to subsidize people who trade in their old vehicles for new ones. If the President seeks to stimulate the economy, and also to produce environmental improvements, economists will provide indispensable guidance (above all by projecting the results of the program with a useful cost–benefit analysis). Or suppose that the President wants the Department of Energy to issue a new energy efficiency regulation for household appliances and directs the Department to choose a level of stringency that will maximize net benefits. Again, economists are in the best position to help the Department to succeed in that task by offering an analysis of possible tradeoffs. As stringency increases, the costs will eventually come to exceed the benefits—but at what point? In many ways, economists are like lawyers, who also have specialized knowledge to which public officials need access in order to do their jobs well.

Nudges Do Not Undermine Human Agency: A Note

Abstract: Some people believe that nudges undermine human agency, but with appropriate nudges, neither agency nor consumer freedom is at risk. On the contrary, nudges can promote both goals. In some contexts, they are indispensable. There is no opposition between education on the one hand and nudges on the other. Many nudges are educative. Even when they are not, they can complement, and not displace, consumer education.

Historical Explanations Always Involve Counterfactual History

Abstract: Historical explanations are a form of counterfactual history. To offer an explanation of what happened, historians have to identify causes, and whenever they identify causes, they immediately conjure up a counterfactual history, a parallel world. No one doubts that there is a great deal of distance between science fiction novelists and the world’s great historians, but along an important dimension, they are playing the same game.

Where Do Norms Come From

Abstract: This essay is a review of Edna Ullmann-Margalit’s pathbreaking 1978 book, The Emergence of Norms. It urges that Ullmann-Margalit’s treatment of PD norms and coordination norms remains convincing, but that a great deal of work remains to be done on the topic of norms of partiality, where adaptive preferences and preference falsification play significant roles. It also emphasizes the importance of distinguishing between causal and functional accounts of norms.

There Is Nothing That Interpretation Just Is

Abstract: Some people believe that the very idea of interpretation requires judges to adopt a particular method for interpreting the Constitution. The problem with this view is that in constitutional law, the general idea of interpretation is compatible with a range of different approaches, and among them, none is mandatory, in the sense of having some unique or privileged connection with the general idea. Any particular approach must be defended on the ground that it would make our constitutional order better rather than worse. No one should doubt that there are legitimate questions about the institutional capacities of judges, and about the virtues and vices of a deferential role on their part; the answers to those questions can motivate a view about constitutional interpretation. But they do not depend on an understanding of what interpretation necessarily requires.

Fifty Shades of Manipulation

Abstract: A statement or action can be said to be manipulative if it does not sufficiently engage or appeal to people’s capacity for reflective and deliberative choice. One problem with manipulation, thus understood, is that it fails to respect people’s autonomy and is an affront to their dignity. Another problem is that if they are products of manipulation, people’s choices might fail to promote their own welfare, and might instead promote the welfare of the manipulator. To that extent, the central objection to manipulation is rooted in a version of Mill’s Harm Principle: People know what is in their best interests and should have a (manipulation-free) opportunity to make that decision. On welfarist grounds, the norm against manipulation can be seen as a kind of heuristic, one that generally works well, but that can also lead to serious errors, at least when the manipulator is both informed and genuinely interested in the welfare of the chooser. For the legal system, a pervasive puzzle is why manipulation is rarely policed. The simplest answer is that manipulation has so many shades, and in a social order that values free markets and is committed to freedom of expression, it is exceptionally difficult to regulate manipulation as such. But as the manipulator’s motives become more self-interested or venal, and as efforts to bypass people’s deliberative capacities becomes more successful, the ethical objections to manipulation become very forceful, and the argument for a legal response is fortified. The analysis of manipulation bears on emerging first amendment issues raised by compelled speech, especially in the context of graphic health warnings. Importantly, it can also help orient the regulation of financial products, where manipulation of consumer choices is an evident but rarely explicit concern.

Nudges, Agency, Navigability, and Abstraction: A Reply to Critics

Abstract: This essay, for a special issue of the Review of Philosophy and Psychology, responds to ten papers that explore the uses and limits of nudges and choice architecture. The essay has three general themes. The first involves the objection that nudging threatens human agency. My basic response is that human agency is fully retained (because nudges do not compromise freedom of choice) and that agency is always exercised in the context of some kind of choice architecture. The second theme involves the importance of having a sufficiently capacious sense of the category of nudges, and a full appreciation of the differences among them. Some nudges either enlist or combat behavioral biases but others do not, and even among those that do enlist or combat such biases, there are significant differences. The third general theme is the need to bring various concerns (including ethical ones) in close contact with particular examples. A legitimate point about default rules may not apply to warnings or reminders. An ethical objection to the use of social norms may not apply to information disclosure. Here as elsewhere, abstraction can be a trap. We continue to learn about the relevant ethical issues, about likely public reactions to nudging, and about differences across cultures and nations. Future progress will depend on a high level of concreteness, perhaps especially in dealing with the vexing problem of time-inconsistency.

The New Coke: On the Plural Aims of Administrative Law

Abstract: In the early twenty-first century, public law is being challenged by a fundamental assault on the legitimacy of the administrative state, under the banner of “the separation of powers.” The challengers frequently refer to the specter of Stuart despotism, and they valorize a (putatively) heroic opponent of Stuart despotism: the common-law judge, symbolized by Edward Coke. The New Coke is a shorthand for a cluster of impulses stemming from a belief in the illegitimacy of the modern administrative state. Despite its historical guise, the New Coke is a living-constitutionalist movement, a product of thoroughly contemporary values and fears -- perhaps prompted by continuing rejection, in some quarters, of the New Deal itself, and perhaps prompted by a reaction by some of the Justices to controversial initiatives from more recent presidents. In two important decisions in 2015, however, a supermajority of the Court refused to embrace the New Coke, and properly so. Instead the Court issued the long-awaited Vermont Yankee II, insisting that courts are not authorized to add procedures to those required by the APA, and reaffirmed the validity of Auer deference to agency interpretations of their own regulations. The Court’s approach promises to honor the multiple goals of administrative and constitutional law without embracing novel, ungrounded claims that betray basic commitments of the public legal order. For now, the center holds.

How Star Wars Illuminates Constitutional Law

Abstract: Human beings often see coherence and planned design when neither exists. This is so in movies, literature, history, economics, and psychoanalysis – and constitutional law. Contrary to the repeated claims of George Lucas, its principal author, the Star Wars series was hardly planned in advance; it involved a great deal of improvisation and surprise, even to Lucas himself. Serendipity and happenstance, sometimes in the forms of eruptions of new thinking, play a pervasive and overlooked role in the creative imagination, certainly in single-authored works, and even more in multi-authored ones extending over time. Serendipity imposes serious demands on the search for coherence in art, literature, history, and law. That search leads many people (including Lucas) to misdescribe the nature of their own creativity and authorship. The misdescription appears to respond to a serious human need for sense-making and pattern-finding, but it is a significant obstacle to understanding and critical reflection. Whether Jedi or Sith, many authors of constitutional law are a lot like the author of Star Wars, disguising the essential nature of their own creative processes.

Behavioral Economics and Consumption

Abstract: Behavioral economics explores why people sometimes fail to make rational decisions, and how their behavior departs from the predictions of standard economic models. Insights gained from studies in behavioral economics are used in consumer research and consumer policy to understand and improve individuals' decisions about health, wealth, and happiness. Keywords: consumption; decision making; psychology; policy; politics

Active choosing or default rules?: The policymaker's dilemma

Abstract: It is important for people to make good choices about important matters, such as health insurance or retirement plans. Sometimes it is best to ask people to make active choices. But in some contexts, people are busy or aware of their own lack of knowledge, and providing default options is best for choosers. If people elect not to choose or would do so if allowed, they should have that alternative. A simple framework, which assesses the costs of decisions and the costs of errors, can help policymakers decide whether active choosing or default options are more appropriate.