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How behavioral decision research can enhance consumer welfare: From freedom of choice to paternalistic intervention

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Abstract

Decision-making researchers have largely focused on showing errors and biases in consumers' decision-making processes without paying much attention to the social welfare and policy implications of these systematic behaviors. In this paper, we explore how findings and methods in behavioral decision research can be used to help consumers improve their decision making and enhance their well-being. We first review select findings in behavioral decision research to explain why consumers need help in decisions, and based on these findings, suggest various interventions that could be effective within the scope of libertarian paternalism. Ethics and effectiveness of the interventions are also discussed.

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Authors and Affiliations

  1. Robert H. Smith School of Business, University of Maryland, College Park, MD, 20742, USA

    Rebecca K. Ratner

  2. Rotman School, University of Toronto, Toronto, ON, M5S 3E6, Canada

    Dilip Soman

  3. Wharton School, University of Pennsylvania, Philadelphia, PA, 19104, USA

    Gal Zauberman, B. Kyu Kim, Fern Lin & Deborah A. Small

  4. Duke University, Durham, NC, 27708, USA

    Dan Ariely

  5. INSEAD, Singapore, Singapore

    Ziv Carmon

  6. Tuck School of Business, Dartmouth College, Hanover, NH, 03755, USA

    Punam A. Keller

  7. Olin Business School, Washington University in St. Louis, St. Louis, MO, 63130, USA

    Selin Malkoc

  8. INSEAD, Fontainebleau, France

    Klaus Wertenbroch

Authors
  1. Rebecca K. Ratner
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  2. Dilip Soman
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  3. Gal Zauberman
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  4. Dan Ariely
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  5. Ziv Carmon
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  6. Punam A. Keller
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  7. B. Kyu Kim
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  8. Fern Lin
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  9. Selin Malkoc
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  10. Deborah A. Small
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  11. Klaus Wertenbroch
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Corresponding author

Correspondence to Rebecca K. Ratner.

Additional information

This paper draws on discussions in a session “Helping Consumers Help Themselves through Choice” at the Invitational Choice Symposium in June 2007 co-chaired by Rebecca Ratner, Dilip Soman, and Gal Zauberman.

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Ratner, R.K., Soman, D., Zauberman, G. et al. How behavioral decision research can enhance consumer welfare: From freedom of choice to paternalistic intervention. Mark Lett 19, 383–397 (2008). https://doi.org/10.1007/s11002-008-9044-3

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  • DOI: https://doi.org/10.1007/s11002-008-9044-3

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