Life is a battlefield

There are two standard policy alternatives for combating the harmful behaviors that commercialism encourages, ineffective soft paternalistic requirements mandating that consumers receive helpful information, such as calorie counts; and hard paternalistic rules that curtail individual choice, such as restrictions on sugary soft-drinks and other unhealthy options. Perhaps the best approach for dealing with the clash between short-term pleasures and long-term interests is to take a libertarian path between hard and soft paternalism, one that encourages good behavior while allowing individual choice. his approach recognizes that big obstacles block our good intentions from becoming actual behaviors, but it stops short of imposing inflexible restrictions or penalties. In the libertarian approach, instead of giving people lots of information about retirement savings and letting them decide on the right mutual fund, we can automatically put them into a good mutual fund that performs well for most people and then let them opt out if they want something different.

Duke Scholars

Author Dan Ariely Fuqua School of Business