Weekly Top 5 Papers – March 29, 2013

1. The Storrs Lectures: Behavioral Economics and Paternalism by Cass Sunstein (Harvard Law School)

Cass Sunstein Is paternalism justifiable? Many people (including many economists) have been comfortable with the view that when people’s decisions affect only themselves, government should not intrude on their decisions. But behavioral economists and cognitive psychologists have been raising serious doubts about that view. In this paper,

I bring those doubts into contact with the most powerful objections to paternalism. A general conclusion is that if we know that human beings err, we should be able to identify many opportunities to improve their welfare with behaviorally informed regulation. At the same time, such regulation should generally consist of nudges — forms of regulation that steer people but that ultimately maintain freedom of choice. The paper can be taken as an invitation both for a lot more theoretical work and for a much better empirical understanding of the costs and benefits of paternalistic approaches.

2. Walking Back from Cyprus by Lee Buchheit (Cleary Gottlieb Steen & Hamilton LLP – New York Office) and G. Gulati (Duke University – School of Law) 3. A Brief Introduction to the Basics of Game Theory by Matthew Jackson (Stanford University – Department of Economics) 4. Choice Construction Versus Preference Construction: The Instability of Preferences Learned in Context by On Amir (University of California, San Diego (UCSD) – Rady School of Management) and Jonathan Levav (Columbia Business School – Marketing)

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