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Conservation of behavioral diversity: on nudging, paternalism-induced monoculture, and the social value of heterogeneous beliefs and behavior

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Aims of life vary with each and every individual; and the more society is civilized, the more will individuality be developed, and the more will desires be varied.

—Kropotkin (1892, Chapter IX paragraph 1).

Abstract

Heterogeneous beliefs and decision processes generate positive externalities for social and economic systems, analogous to biodiversity in biological systems. Although some aspects of biodiversity (e.g., pests, parasites and bacteria) can lead to ecological and economic problems, biodiversity provides flows of beneficial ecological services and is widely regarded as a valuable natural resource and informational asset, whose value increases as we learn more and science progresses (Wilson in Bioscience 35(11):700–706, 1985). Heterogeneous beliefs and decision processes (and heterogeneous behaviors they generate) similarly provide flows of beneficial economic services. Behavioral diversity should therefore be seen as a natural resource and informational asset likely to improve human wellbeing in surprising ways in the future. Paternalistic policies motivated by the goal of “correcting” allegedly suboptimal beliefs and behavior that diverge from expert recommendations jeopardize behavioral diversity at a substantial cost to social welfare. The risk of encroaching on this beneficial behavioral heterogeneity with policies that aim to induce behavioral and belief monocultures should be included explicitly as costs when evaluating nudges and other paternalistic policies.

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Notes

  1. See, for example, Gigerenzer and Selten (2001), Smith (2003), Berg and Gigerenzer (2010), Berg (2014a) and Mousavi and Kheirandish (2014) for definitions of ecological rationality and the research program based on Herbert Simon's seminal work on bounded rationality. Ecological rationality measures "success" of procedures for making inferences or decisions, and the social institutions that influence those decisions and inferences, by domain-specific performance metrics (e.g., wealth in financial decision making tasks, clinical outcomes in health decision making tasks, objective accuracy in prediction tasks, happiness in mate choice, etc.).

  2. Simon (1957, p. 198): "The first consequence of the principle of bounded rationality is that the intended rationality of an actor requires him to construct a simplified model of the real situation in order to deal with it. He behaves rationally with respect to this model, and such behavior is not even approximately optimal with respect to the real world."

    Simon (1979, p. 498): "The first is to retain optimization, but to simplify sufficiently so that the optimum (in the simplified world!) is computable. The second is to construct satisficing models that provide good enough decisions with reasonable costs of computation. By giving up optimization, a richer set of properties of the real world can be retained in the models…"

  3. Shafer (1986): "The idea that subjective expected utility is uniquely normative plays only a regressive role; it obstructs the development and understanding of alternative tools for subjective judgment of probability and value. Thus, subjective expected utility is just one of several possible tools for constructing a decision."

  4. For example, we can expect some proportion of the population to formulate different beliefs and take different actions depending on whether expert advice is disseminated as "Consider this information and then you can decide what is best for you" as opposed to "This decision has been structured to influence you to choose what experts believe is best for you."

  5. In Law, Legislation and Liberty (1973, p. 35), Hayek wrote: "Order is an indispensable concept for the discussion of all complex phenomena, in which it must largely play the role the concept of law plays…".

  6. Zywicki (2018) reports that participants in the private nudging program, Save More Tomorrow, contributed significantly more to tax-advantaged 401 k retirement accounts. Those participants who were successfully nudged to save more also wound up with problems, such as signficantly higher revolving balances on credit cards and other high-interest-rate credit products like payday lending. In Zywicki's evaluation, although the nudge worked as designed, the evidence suggested its effects on participants' financial and psychological wellbeing were net negative.

  7. (Simon1969, p. 53): "Human beings, viewed as behaving systems, are quite simple. The apparent complexity of our behavior over time is largely a reflection of the complexity of the environment in which we find ourselves."

  8. A similar tension can be seen in the sociology literature concerning ethnic and cultural diversity. Collins and Bilge (2016) advocate intersectional praxis acknowledging the autonomy and heterogeneity of individuals sharing a common minority group status. They argue for a pluralistic and context-specific approach rather than one-size-fits-all prescriptions for addressing social inequality based on single-identity factors (e.g., race, gender, social class). It is noteworthy that Collins and Bilge's arguments also apply to minority groups (defined by their anomalous dietary, health, and financial behaviors) targeted by nudge policies.

  9. Identification of rationality with internal logical consistency underpins the biases and heuristics research program inspired largely by Kahneman, which focuses on deviations from neoclassical rationality axioms and its prescriptive program of inducing greater behavioral conformity with those consistency requirements (de-biasing as in Jolls et al. 1998 or Thaler and Sunstein 2008; cf. Sheffrin 2017).

  10. In contrast, nudges designed to cue "System 2" such as cooling-off periods (i.e., more deliberation and analytic reflection of benefits and costs) are not vulnerable to this criticism.

  11. Hawkes (2018) reports allegations of influence from lobbyists representing pharmaceutical firms and complaints about removal of board members from Cochrane (a widely respected UK charity and Limited Liability Company). Many observers regard Cochrane as the most trusted and well-executed institutions committed to evidence-based evaluation of drugs and medical procedures using sophisticated meta-analyses of medical research studies. These allegations and controversy among former Cochrane Board members illustrate how fragile perceptions of experts' objectivity are and their vulnerability to (perceived) un-transparent influence.

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Authors and Affiliations

  1. DCC Chair in Entrepreneurship, Department of Economics, Otago Business School, University of Otago, PO Box 56, Dunedin, 9054, New Zealand

    Nathan Berg

  2. Newcastle Business School, University of Newcastle, Newcastle, Australia

    Nathan Berg

  3. Sociology, Gender Studies and Criminology, Division of Humanities, University of Otago, PO Box 56, Dunedin, 9054, New Zealand

    Yuki Watanabe

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Berg, N., Watanabe, Y. Conservation of behavioral diversity: on nudging, paternalism-induced monoculture, and the social value of heterogeneous beliefs and behavior. Mind Soc 19, 103–120 (2020). https://doi.org/10.1007/s11299-020-00228-2

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