Wednesday, April 07, 2010

Thaler's Response

New paternalist Richard Thaler has posted his response to my essay on Cato Unbound. I won't be posting a reply until after all three respondents have had their say.

UPDATE, 4/8/10: Argh. Waiting is so hard.


Unknown said...

I found Thaler's response to be insubstantial. (He spent the first two paragraphs belittling irrational fears (albeit in a very clever way) and the last two belittling you.) He didn't even respond to my favorite point which is that politicians face the same time horizon bias that everyone else does. (Politicians are people too!)

This made me think about the human tendency to discount future costs. Behavioralists use this as justification for shifting the incentives so that people make choices as if they valued the future as much as the present (which, BTW would be a bizarre world) but it seems that they are once again experiencing confirmation bias when they believe that this means eating healthier foods, smoking less and jogging in the morning.

In fact, when we make plans to quit smoking tomorrow, go on a diet next week and get up early to jog, we are discounting the future cost of doing those things. If we were to value the future as much as the present, or even lessen the tendency to discount the future, then we would never have made the plans to go jogging in the first place.

Ran said...

Honestly, Thaler's response hardly requires a re-response. You can just tell people to re-skim your original essay and see how little of it he was able to scrape together any reply to. ;-)

But I loved the condescending tone that pervaded his whole piece. As you pointed out in your essay, he is a master of framing.

David Friedman said...

Thaler asks for evidence of the slippery slope. I posted some quite a while back in a discussion of Nudges on my blog. It consisted of two examples at the same college of "voluntary" fees, set up to make it inconvenient to decline to pay them--assuming that those paying them found out that they had the option of doing so. One was recent, one thirty-some years ago: