The Curious Case of Choice Architect: Examining the Philosophical Inconsistencies of Libertarian Paternalism

Francis Kuriakose and Deepa Kylasam Iyer

MPRA Paper from University Library of Munich, Germany

Abstract: Classical economics works on the principle that individuals are rational and make decisions to maximize their self interest. However in real situations, individuals face a conflict between rational and irrational selves leading to decision making that does not leave them better off. Libertarian paternalism proposes a solution to this rationality problem in an individual by conceiving a choice architect. Choice architect is a third party capable of arriving at what a perfectly rational choice would be and ‘nudges’ an individual towards making that choice. Libertarian paternalists claim that choice architect does not interfere with the freedom of an individual because the choices he offers are easily reversible, i.e, an individual can reject it at any given point in time. Libertarian Paternalism seems to offer the third way between absolute autonomy of individual choice (libertarianism) and third party intervention (paternalism). This paper argues that the conception of a choice architect comes out of a hasty commitment to reconciling libertarianism and paternalism by placing perfect rationality and autonomy in two separate individuals in the case of a single decision making process. The paper proposes alternatives to confront the rationality problem.

Keywords: Libertarian paternalism; Nudging; Behavioural economics; Choice architect; Rationality; Autonomy (search for similar items in EconPapers)
JEL-codes: A1 A12 D0 D03 D8 D81 D83 (search for similar items in EconPapers)
Date: 2017-04-24
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