(MENAFN- ValueWalk) Economist Richard Thaler recently . All too often, people fail to act as rationally as conventional economic models assume, and at least some of those errors are systematic in nature. Such errors can lead to mistakes that greatly diminish our health, happiness, and welfare.
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Thaler and many other behavioral economics scholars argue that government should intervene to protect people against their cognitive biases, by various forms of . In the best-case scenario, government regulators can , thereby enhancing our welfare without significantly curtailing freedom.
Irrational Nudgers
But can we trust government to be less prone to cognitive error than the private-sector consumers whose mistakes we want to correct? If not, paternalistic policies might just replace one form of cognitive bias with another, perhaps even worse one. Unfortunately, a recent study suggests that politicians are prone to severe cognitive biases too – especially when they consider ideologically charged issues. Danish scholars Caspar Dahlmann and Niels Bjorn Petersen from a study of Danish politicians:
Even when presented additional evidence to help them correct their mistakes, Dahlmann and Petersen found that the politicians tended to double down on their errors rather than admit they might have been wrong. And it's worth noting that Denmark is often held up as . If Danish politicians are prone to severe ideological bias in their interpretation of evidence, the same – or worse – is likely to be true of their counterparts in the United States and elsewhere.
Politicians aren't just biased in their evaluation of political issues. Many of them are ignorant, as well. For example, famed political journalist Robert Kaiser When Republican senators tried to push the Graham-Cassidy health care reform bill through Congress last month, few had much understanding of what was in the bill. One GOP lobbyist
Given such widespread ignorance and bias, it is unlikely that we can count on politicians to correct our cognitive errors. To the contrary, giving them the power to try to do so will instead give free rein to the politicians' own ignorance and bias.
Market Decisions
But perhaps voters can incentivize politicians to evaluate evidence more carefully. In principle, they could screen out candidates who are biased and ill-informed, and elect knowledgeable and objective decision-makers. Sadly, that is unlikely to happen, because the voters themselves , often being . And like the Danish politicians in Dahlmann and Petersen's study, voters also .
By contrast, private sector decisions are more likely to make a difference.
Significantly, both voters and politicians tend to be. The politicians surveyed by Dahlmann and Petersen had little difficulty in evaluating data on the performance of 'School A' versus 'School B,' but were highly biased in considering the performance of private schools as compared to public ones. The latter is a controversial political issue, while the former is not.
This is not a surprising result. Making rational decisions and keeping our biases under control often requires considerable effort. Voters have very little incentive to make such an effort on political issues because the chance that any one vote will make a difference to the outcome of an election is extraordinarily small. As a result, . By contrast, private sector decisions are more likely to make a difference., though obviously few of us avoid bias completely. It is no accident that most people spend more time and effort seeking out and evaluating information when they decide what TV or smartphone to buy than when they decide who to vote for in a presidential election – or any other election.
Politicians arguably have stronger incentives to learn about politics than voters do. Their decisions on policy issues often do make a difference. But because the voters themselves are often ignorant and biased, they tend to tolerate – and even reward – policy ignorance among those they elect. Politicians have strong incentives to work on campaign skills, but relatively little incentive to become knowledgeable about policy. It is not surprising that .
Reprinted from
ILYA SOMIN is Professor of Law at George Mason University. His research focuses on constitutional law, property law, and the study of popular political participation and its implications for constitutional democracy.
This article was originally published on FEE.org. Read the .
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