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Economics and the Pursuit of Happiness

5 Parts, 15 Lessons, 51 Videos   3H 30M
Parts
  • Introduction
  • Political Economy and Public Choice
    • Lesson 1: Political Implications of Economic Systems
    • Lesson 2: The Public Choice Perspective
    • Lesson 3: Bureaucracy and the Commercial Order
  • Moral Dimensions of Property and Trade
    • Lesson 4: Justice in Exchange
    • Lesson 5: Social Aspects of Justice and Commerce
    • Lesson 6: Property, Production, and Distribution
  • The Contest of Ideas: Keynes and Hayek
    • Lesson 7: John Maynard Keynes: Radical Conservative
    • Lesson 8: Hayek: Conserving Freedom
    • Lesson 9: Keynesianism and the Limits of Economics
  • The Contest of Ideas: Free to Choose?
    • Lesson 10: Freedom of Choice
    • Lesson 11: Hayek: Libertarian Paternalism
    • Lesson 12: On the Nature of Liberty
  • The Moral Dimensions of the Market Economy
    • Lesson 13: Moral Norms
    • Lesson 14: Justifying Income, Wealth, and Capitalism
    • Lesson 15: Market Freedom, Efficiency, and Tradition

Lesson 11 Lesson 11: Hayek: Libertarian Paternalism

Presented by: Dr. Jay Richards
Busch School of Business and Economics at the Catholic University of America

Playlist

  1. Lesson 11, Video 1 - Dr. Jay Richards
  2. Lesson 11, Video 2 - Dr. Jay Richards
  3. Lesson 11, Video 3 - Dr. Jay Richards

“Nudge” Economics and the Conditioning of Choice

Behavioral Economics is an increasingly influential school of economic thought that draws heavily on the insights of modern psychology. It takes a pessimistic view toward an individual’s ability to act rationally and make good decisions. But “good” by whose measure? “Libertarian paternalism” is one middle way that allows for a wide domain of personal choice while still arranging choice objects in such a way as to lead people to better choices as determined by experts. Students in this lesson will ask: are human choices “predictably irrational?” Are we ever wholly “free to choose”?

Key Concepts: (1) Choice Architecture, (2) Libertarian Paternalism, (3) Status Quo Bias, (4) Nudge

Lesson 11 Quick Quiz

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EPH Lesson 11: Hayek: Libertarian Paternalism

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“When we use the term libertarian to modify the term paternalism, we simply mean liberty-preserving.”

Richard H. Thaler and Cass R. Sunstein

“In our understanding, a policy is ‘paternalistic’ if it tries to influence choices in a way that will make choosers better off, as judged by themselves.”

Richard H. Thaler and Cass R. Sunstein

“Drawing on some well-established findings in social science, we show that in many cases, individuals make pretty bad decisions – decisions they would not have made if they had paid full attention and possessed complete information, unlimited cognitive abilities, and complete self- control.”

Richard H. Thaler and Cass R. Sunstein

“A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives."

Richard H. Thaler and Cass R. Sunstein

"Because we approve of more choice, we want to focus on one important part of the school choice issue – how to create plans that put parents in a position to make sensible decisions for their children.”

Richard H. Thaler and Cass R. Sunstein

Learn More

h Link

“Nudge: Improving School Choices”

Read Now
h Video

Richard Thaler and Cass Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. (New York, NY: Penguin Books, 2008, 2009). “Introduction,” pp. 1-16, and Chapter 13, “Improving School Choices,” pp. 201-208.

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h Video

“Cass Sunstein on Why Nudge?”

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h Video

“Why Economics Needs a Moral Dimension” with Rob Johnson and Michael Sandel (from the Institute for New Economic Thinking and Harvard University)

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h Video

“The Limits of the ‘Rational Economic Man’” with Greg Mankiw and Michael Sandel (from the Institute for New Economic Thinking and Harvard University)

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h Video

“Behavioral Economics: Why Do We Make Poor Decisions?” with Antony Davies and ErikaGrace Davies & Learn Liberty

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