Behavioral economics and austrian economics: Lessons for policy and the prospects of nudges

Roberta Muramatsu () and Fabio Barbieri
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Roberta Muramatsu: Department of Economics, Mackenzie Presbyterian University, Brazil
Fabio Barbieri: Department of Economics, University of São Paulo, Brazil

Journal of Behavioral Economics for Policy, 2017, vol. 1, issue 1, 73-78

Abstract: This paper draws on Austrian Economics contributions and its criticism of interventionist policies and programs to assess the prospects of Behavioral economics nudges and libertarian paternalism in a world where fallible knowledge is pervasive. We go on to argue that one of the main problems underlying behaviorally informed regulations and nudging in the real world is epistemic. This is largely so because policy makers tend to underestimate "the importance of the knowledge of the particular circumstances of time and place" and their own cognitive limitations. It concludes with two advices to policy makers and regulators. One is that decisions over nudging are to be made on a case-to-case basis. Another is that it is worthwhile to dig deeper into specificities of institutional environments suggesting under which conditions nudges can(not) deliver what they promise.

Keywords: austrian economics; behavioral economics; policy; biases; nudges (search for similar items in EconPapers)
JEL-codes: B40 B41 D11 D91 (search for similar items in EconPapers)
Date: 2017
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