http://organizationsandmarkets.com/2006/09/18/does-bounded-rationality-justify-paternalism/ Economics of organizations, strategy, entrepreneurship, innovation, and more Tue, 02 Dec 2008 23:40:09 +0000 http://wordpress.org/?v=MU hourly 1 http://organizationsandmarkets.com/2006/09/18/does-bounded-rationality-justify-paternalism/#comment-2816 David Gordon Tue, 19 Sep 2006 15:36:53 +0000 http://organizationsandmarkets.wordpress.com/2006/09/18/does-bounded-rationality-justify-paternalism/#comment-2816 Richard Epstein has an excellent discussion of cognitive bias arguments for state intervention in Skepticism and Freedom (University of Chicago Press, 2003). Richard Epstein has an excellent discussion of cognitive bias arguments for state intervention in Skepticism and Freedom (University of Chicago Press, 2003).

]]> http://organizationsandmarkets.com/2006/09/18/does-bounded-rationality-justify-paternalism/#comment-2768 Eric H Tue, 19 Sep 2006 01:50:49 +0000 http://organizationsandmarkets.wordpress.com/2006/09/18/does-bounded-rationality-justify-paternalism/#comment-2768 If I understand Schwarz' Paradox of Choice correctly, a cooling off period might have the opposite of the intended effect. Given more time to consider alternatives, people might not make a good purchase because they are given time to imagine all of the purchases they could have made, some of which might well be worse than the original purchase. They might also get frozen by the fear of making the wrong choice, and therefore making no choice at all when the original was "correct". All of this because of ... bounded rationality. It's a two-edged sword, and I see no reason to put it in the hands of a species suffering from at least as many problems as we homo sapiens do (homo bureacraciens). If I understand Schwarz’ Paradox of Choice correctly, a cooling off period might have the opposite of the intended effect. Given more time to consider alternatives, people might not make a good purchase because they are given time to imagine all of the purchases they could have made, some of which might well be worse than the original purchase. They might also get frozen by the fear of making the wrong choice, and therefore making no choice at all when the original was “correct”. All of this because of … bounded rationality. It’s a two-edged sword, and I see no reason to put it in the hands of a species suffering from at least as many problems as we homo sapiens do (homo bureacraciens).

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