Libertarian paternalism, information production, and financial decision making


Journal Article

We develop a theoretical model to analyze the effects of libertarian paternalism on information production and financial decision making. Individuals in our model appreciate the information content of the recommendations made by a social planner. This affects their incentive to gather information, and in turn the speed at which information spreads across market participants, via social learning or formal advice channels. We characterize situations in which libertarian paternalism improves welfare and contrast them with scenarios in which this policy is suboptimal because of its negative impact on the production and propagation of information. © 2013 The Author.

Full Text

Duke Authors

Cited Authors

  • Carlin, BI; Gervais, S; Manso, G

Published Date

  • September 1, 2013

Published In

Volume / Issue

  • 26 / 9

Start / End Page

  • 2204 - 2228

Electronic International Standard Serial Number (EISSN)

  • 1465-7368

International Standard Serial Number (ISSN)

  • 0893-9454

Digital Object Identifier (DOI)

  • 10.1093/rfs/hht025

Citation Source

  • Scopus