Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers

B. Douglas Bernheim and Antonio Rangel
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Antonio Rangel: Department of Economics, Stanford University

No 04-033, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: This paper has two goals. First, we discuss several emerging approaches to applied welfare analysis under non-standard (“behavioral”) assumptions concerning consumer choice. This provides a foundation for Behavioral Public Economics. Second, we illustrate applications of these approaches by surveying behavioral studies of policy problems involving saving, addiction, and public goods. We argue that the literature on behavioral public economics, though in its infancy, has already fundamentally changed our understanding of public policy in each of these domains.

Keywords: mistakes; decision making; behavioral economics; psychology and economics; neuroeconomics; public goods; addiction; savings; corrective policy; paternalism; welfare economics; revealed preference (search for similar items in EconPapers)
Date: 2005-06
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Citations: View citations in EconPapers (75)

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Working Paper: Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers (2005)
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