Choice Architecture

Thaler and Sunstein make the case for libertarian paternalism, as I noted yesterday.

Some might object that nudging is not libertarian, but statism disguising itself as liberty.

Thaler and Sunstein have a good answer for that. Any situation that requires choice has an implicit "choice architecture." Doing nothing is also a choice.

A big finding of the psychological research and behavioral economics that lies behind the book Nudge, though, is that many times most people don't get around to making a choice, or implementing the choice they made in their minds, or find too many choices paralyzing. None of these conditions are the same as reflectively choosing not to act. The implicit choice architecture of many choices we face tends to produce thoughtless inertia.

What a thoughtful choice architect would do about that situation, therefore, is try to structure the choices such that it is easier to assess the choices, and put our choice into effect. Moreover, there are many situations in which we can know what most people are likely to want to choose. Straight-up paternalism (whether exercised by the state or any other institution) would lead the choice architect to make that choice for other people. What libertarian paternalism does instead is to make it easy to take the most likely choice as a default, but allow an easy and clear opt-out if the chooser wishes too.

Choice architecture is inevitable - it is implicit in any array of choices. Nudging people to choose, and choose wisely, is a social good without social force.