De Economist

, Volume 158, Issue 2, pp 101–122

What Does Behavioral Economics Mean for Policy? Challenges to Savings and Health Policies in the Netherlands

Open Access
Article

Summary

Key findings in behavioral economics are that people’s behavior (revealed preferences) is often not in line with their intentions (normative preferences), that they are sensitive to the way choices are presented to them, and that their cognitive abilities are limited. This is manifest in particular in areas of intertemporal choice, like personal finance and health-related behavior. Policy makers can develop policies that help citizens to make choices that are more in line with their normative preferences. In this paper we summarize the behavioral evidence, discuss the motivations for interventions, and show how recent behavioral insights can help to improve upon existing policies. These new policies could be described as libertarian paternalism, and include setting defaults thoughtfully and using unorthodox commitment mechanisms.

Keywords

behavioral economics health policies savings policies 

JEL Code(s)

D03 D14 I18 

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Copyright information

© The Author(s) 2010

Authors and Affiliations

  1. 1.Department of EconomicsTilburg UniversityTilburgThe Netherlands
  2. 2.Scientific Council for Government PolicyThe HagueThe Netherlands
  3. 3.Department of FinanceTilburg UniversityTilburgThe Netherlands

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