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F. A. Hayek’s work made the case for individual freedom of choice, in part because third parties or planners tend to lack the knowledge that individuals hold about their true preferences, or of the traditions and norms that underpin choices. Interferences with evolved market practices and personal freedom, then, will tend to make choosers worse off.
Behavioral economists hold, though, that some choices are driven by a lack of information or else psychological, cognitive, or social phenomena that make such decisions irrational or undesirable. If so, the question is what can be done about it, given the evident limits and disruption of top‐down decisionmaking by planners.
Cass Sunstein believes that a neo‐Hayekian behavioral approach to policymaking would recognize choosers’ biases but also acknowledge the downsides of imposing the preferences of planners. Ideally, he suggests, empirical research should seek to identify what choosers truly want under “epistemically favorable conditions” such that policy can be put into the service of our own preferences.
Does the work of behavioral economists land a killer blow against free choice? And is Hayekian behavioral economics, in practice, an oxymoron? Please join us for this informative conversation.