Although the desirability of all potential interventions—nudges included— from a law and economics perspective depends on their net welfare effects, most scholarship and policymaking treats behavioral policies as if they were “a free lunch,” and even economists have only recently begun assessing them. Notwithstanding their “soft” nature, however, nudges can generate substantial private costs that must be taken into account to appropriately evaluate these regulatory instruments.
Professor Tor delivered a talk about his ongoing research on "Disciplining the Behavioral Revolution" at the Fellows Forum of the Israel Institute for Advanced Studies in Jerusalem on December 22.
In his research Tor says that the global popularity of behavioral regulation—commonly referred to as “nudging”—has increased substantially over the last decade. Today, governments and other organizations use nudges extensively, as both substitutes for and complements to traditional regulatory instruments. As “soft” regulatory instruments, behavioral policies appeal to policymakers who wish to protect citizen freedom and autonomy to the extent possible, as well as to political actors who believe the public is more accepting of nudges than of “harder,” traditional regulation. Regulators find behavioral instruments particularly attractive, moreover, because they can be implemented at substantially lower costs than those required when deploying traditional regulatory instruments.