Judgments, Decisions, and Public Policy

Behavioral decision theory draws on experimental research in cognitive psychology to provide a descriptively accurate model of human behavior. It shows that people systematically violate the normative assumptions of economic rationality by miscalculating probabilities and making choices based on one-economic criteria. Behavioral decision theory’s ability to capture the complexity of human judgments and choices makes it a useful foundation for improving public policy analysis, design, and implementation. This volume showcases the research of leading scholars who are working on applications of behavioral decision theory in diverse policy settings. It is designed to give policy analysts and practitioners who are non-psychologists a clearer understanding of the complexities of human judgment and choice, and an idea of how to integrate behavioral decision theoretic insights into the policy sciences. This interdisciplinary volume should be insightful and useful wherever people’s judgments and choices matter for policy formulation, acceptance, and effectiveness.

• Bridges two fields: behavioral decision theory and public policy, which is particularly useful for policy scholars • Showcases a range of areas where behavioral decision theory is a useful analytical approach, and demonstrates how this can be done • Many of the contributors to the book are premier scholars in their respective fields

Part I. The Fundamentals of Behavioral Decision Theory: 1. Judgment and decision making: extrapolations and applications Chris Swoyer; 2. Some morals of a theory of non-rational choice Douglas MacLean; 3. Cognition, intuition, and policy guidelines Eldar Shafir; Part II. Economic Applications and Contrasts: 4. Policy analysis and design with losses valued more than gains, and varying rates of time preference Jack L. Knetsch; 5. Comparing micro and macro rationality Robert J. MacCoun; 6. Bounded rationality versus standard utility-maximization: a test of energy ‘price’ responsiveness Lee S. Friedman; Part III. Applications to Political and Legal Processes and Institutions: 7. Judgmental heuristics and news reporting Sharon Dunwoody and Robert J. Griffin; 8. A behavioral approach to political advertising research Jeffrey C. Fox and Rick Farmer; 9. Toward behavioral law and economics Cass R. Sunstein; Part IV. Other Policy Applications: 10. Enhancing the effectiveness of innovative policy instruments: the implications of behavioral decision theory for right-to-know policies Rajeev Gowda; 11. Behavioral perceptions and policies toward the environment Anthony Patt and Richard J. Zeckhauser; 12. The affect heuristic: implications for understanding and managing risk-induced stigma Howard Kunreuther and Paul Slovic; 13. Enlarging the pie by accepting small losses for large gains Jonathan Baron and Max H. Bazerman; Part V. Commentary and Cautionary Note: 14. The virtues of cognitive humility: for us as well as them Philip E. Tetlock.

‘… a useful and stimulating addition to the Cambridge series. It illustrates well the breadth of areas where behavioural decision theory can inform our understanding of the patterns of behaviour and response we encounter. It identifies the fact that we are at the stage where we are becoming only too uncomfortably aware of the magnitude and diversity of the challenges - but where, as yet, we have only reached a limited understanding of how to take proper account of them in the formulation and implementation of public policy.’ Journal of Risk Research