In this paper, I pick up on an important theme in Mario Rizzo’s work: that rationality should be understood more broadly than the rational choice model as learning to adjust behaviour in the light of experience and the mistakes that it yields. In particular, I focus on learning-by-doing (LBD). I argue in the first part of the paper that it should be regarded as one of the central insights in economics, alongside those that are more usually recognised like the gains from trade and the importance of unintended consequences. I use Smith and Hirschman’s discussion of LBD to ground this claim. In the second part of the paper, I turn to the determinants of LBD in teams. I argue that the key rule or constitutional/policy design question is how best to embrace the diversity that is central to LBD within teams without this undermining the social origins of co-operation in teams.

The present study investigates the relation of procedural transparency and compliance with authorities’ regulations. The underlying assumption is that procedural transparency encourages compliance with regulations. In an incentivized experiment, 666 participants took on the role of a business owner and had to fill in a form and spend a certain amount of their income as compliance costs to adhere to safety rules. In a 2 (Business Size: small vs big) × 2 (Penalty Rate: equal vs unequal) × 2 (Penalty Scheme: transparent vs nontransparent) between-subjects design, we investigated whether an unequal penalty rate for small-size in contrast to big-size businesses had a different effect on compliance when this difference was transparent compared to when it was not transparent. Business income, compliance costs, and audit probability were varied within-subject, over 18 decision rounds. We find that the deterring effect of a higher penalty rate for big-size compared to small-size businesses under a nontransparent unequal penalty scheme is attenuated when the same information is available. This supports the idea of a backfiring effect and suggests that authorities need to carefully consider what information about their procedures to communicate in order to avoid the unintended negative effects of increasing transparency.

Daniel Kahneman’s legacy is best understood in light of developments in economic theory in the early-mid-20th century, when economists were eager to put utility functions on a firm mathematical foundation. The axiomatic system that provided this foundation was not originally intended to be normative in a prescriptive sense but later came to be seen that way. Kahneman took the axioms seriously, tested them for descriptive accuracy, and found them wanting. He did not view the axioms as necessarily prescriptive. Nevertheless, in the research program he conceived, factual discoveries about real decision-making were stated as deviations from the axioms and thus deemed ‘errors’. This was an unfortunate turn that needs to be corrected for the psychological enrichment of economics to proceed in a productive direction.

Debtors were stimulated to contact their creditors to negotiate a repayment plan. Contacting creditors was important because debtors were unlikely to repay the debt immediately and upon contacting, debtors could agree on a repayment plan to repay the debt in the long run. Using insights from scarcity theory and nudging techniques, a standard debt repayment letter was adapted and both letters were compared. Experimental results (N = 3,330) provide support for the use of nudging techniques as more debtors agreed on a repayment plan and response rates increased. The results underline the importance of stimulating debtors to contact their creditors.

While in his early years, Kahneman followed the world of classic utilitarianism in which smart individuals base decisions on how they will truly feel each moment in the future, Kahneman in Mandel (2018) adopted a very different position, namely that what matters is the story people tell of their lives. He thus grappled with evolving stories of both the future and the past, and the presence of different decision-supporting evaluations for the short-run and the long-run.

Important challenges like climate change require transformative policy responses. According to a growing public policy literature, such transformative responses typically require complex policy packages that bundle various individual policy instruments to complement each other, compensate transition losers, and create positive synergies. Nevertheless, while adding new instruments to a package can increase policy effectiveness, it comes at a price: increased policy design complexity. Increased complexity potentially leads to fundamental public misperceptions that undermine policy legitimacy and feasibility. Here, I argue that complex policy packages affect public opinion through a compensation, policy perception, and design complexity mechanism. To test this argument, this study assesses if citizens evaluate proposals for isolated climate policies related to food and mobility behaviors differently to complex policy packages. Employing a novel two-stage conjoint-experimental approach with 9115 respondents from the USA and Germany, the study shows that policy packaging increases citizens’ perceived policy effectiveness to reduce climate pollutants, but also perceived restrictions on citizens’ lifestyles. Moreover, increased design complexity can lead citizens to pay special attention to salient costly parts of policy packages. However, increased design complexity does not fundamentally reverse preferences. Through packaging desired and undesired policy instruments, policymakers can increase public support for transformative climate policies.

In this paper, we revisit the Knowledge Problem addressed by Hayek eight decades ago and emphasised more recently by Rizzo and Whitman in their critique of the new paternalist approach of mainstream behavioural economics promoted by Sunstein and Thaler. We do this in light of the work of Michael Polanyi. Polanyi developed a theory of knowledge which has some commonalities with Hayek’s but also departs from it by emphasising the tacit, personal and perceptual dimensions of any process of knowing, thus radically renouncing any attempt of a knowledge typology separating different types of tacit knowledge (TK) and even denying that general knowledge could exist independently of TK.

In October 2021, a majority of the UK gambling industry implemented a new UK safer gambling message, ‘take time to think’, which features on gambling advertising and websites. An effective safer gambling message could plausibly affect several relevant gambling behaviours, with previous research suggesting that message effectiveness is maximised via messages that are displayed prominently immediately prior to gambling. We experimentally tested this message's effect on four contemporaneous gambling behaviours (the proportion of available funds bet, clicks for help service information, the mean speed of play, and the total number of roulette spins made) in an incentivised online roulette game in a sample of UK-based online gamblers. Participants (n = 2,305) were randomly allocated to either (a) ‘no-message’ control, (b) ‘message’ shown throughout the condition or (c) a ‘message+’ condition, where the message was shown throughout and also via a popup immediately prior to the roulette game. Overall, the results showed no credible effects across the four outcome measures when comparing either of the message conditions to the no-message control. Even the prominent display of the ‘take time to think’ message did not lead to credible beneficial effects on a range of contemporaneous gambling behaviours.

Kahneman’s criticism of neoclassical rationality was central to his research programme. He argued that rationality understood as temporal consistency among preferences and beliefs is inapt as a descriptive and prescriptive standard of decision-making. Descriptively, consistency ignores high decision costs and biases, such as framing effects. Prescriptively, it is problematic since it neglects the processual nature of choice and the crucial role of regret. Instead, Kahneman argued in favour of using reasonableness as a standard, though he did not fully develop the concept in his work.

We have previously argued thatbehavioral scientists have been testing and advocating individualistic (i-frame) solutions to policy problems that have systemic (s-frame) causes and require systemic solutions. Here, we consider the implications of adopting an s-frame approach for research. We argue that an s-frame approach will involve addressing different types of questions, which will, in turn, require a different toolbox of research methods.

Behavioural public policy is increasingly interested in scaling-up experimental insights to deliver systemic changes. Recent evidence shows some forms of individual behaviour change, such as nudging, are limited in scale. We argue that we can scale-up individual behaviour change by accounting for nuanced social complexities in which human responses to behavioural public policies are situated. We introduce the idea of the ‘social brain’, as a construct to help practitioners and policymakers facilitate a greater social transmission of welfare-improving behaviours. The social brain is a collection of individual human brains, who are connected to other human brains through ‘social cues’, and who are affected by the material and immaterial properties of the physical environment in which they are situated (‘social complex’). Ignoring these cues and the social complex runs the risk of fostering localised behavioural changes, through individual actors, which are neither scalable nor lasting. We identify pathways to facilitate changes in the social brain: either through path dependencies or critical mass shifts in individual behaviours, moderated by the brain's property of social cohesion and multiplicity of situational and dispositional factors. In this way, behavioural changes stimulated in one part of the social brain can reach other parts and evolve dynamically. We recommend designing public policies that engage different parts of the social brain.

Existing research demonstrates that parents are poorly informed consumers of early childhood education and care (ECEC) services. Choosing such services is a complex process shaped by a combination of logistical limitations (e.g., cost/location), informational barriers and ideas about what the goal of care should be (e.g., education of young children or provision of an environment that feels like home). Experimental studies have also demonstrated that when study participants are informed of the importance of a specific decision, they engage in more complex decision-making. In this article, we test whether providing parents with information about the regulatory stringency of ECEC options available influences their choices regarding ECEC. A conjoint survey designed to capture quasi-behavioural choices for ECEC services was completed by 682 parents. Before engaging with the survey, participants were randomly assigned into either a control group or a treatment group that informed them about the stringency of oversight regarding ECEC options available in the province of Ontario, Canada. Receiving information did not meaningfully change the choices of the entire sample. However, a subgroup analysis revealed an important information effect on parent decisions for lower income/lower-education parents.

Behavioural public policy (BPP) operates within one of four cultural models of public management, an illustration of an influential scheme set out by Christopher Hood. Even though BPP can be fatalist, individualist or egalitarian, so far it has been hierarchicalist. Hallsworth’s manifesto is largely an expression of this hierarchicalist form of public management, with all its limitations and contradictions. As the manifesto pays relatively little attention to decentralist and egalitarian approaches, it misses a radical opportunity. Future work on BPP could incorporate entrepreneurial and egalitarian possibilities while recognising the difficulties of moving away from hierarchalism completely. Even though Hood cautions against a ‘public management for all seasons’, it remains a plausible path for the next generation of researchers and practitioners of BPP.

Times of emergency often serve as triggers for the creation of new policy. Such policies may involve restriction of human rights, and various mechanisms can be used to mitigate the severity of such restrictions. One such mechanism is the temporary measure. A series of three experiments examined the potential of temporary measures for increasing the likelihood of approval of rights-restricting policy and the role of time – both prospectively and retrospectively – in the willingness to restrict human rights. We find that behavioural examination confirms the concerns expressed in the literature regarding temporary legislation. Participants asked to approve a rights-restricting policy were more willing to approve a temporary measure when it was presented as a compromise, and they were more willing to extend a rights-restricting policy when it had previously been implemented. These findings indicate a possible slippery slope effect in temporary legislation: policymakers might be persuaded to approve measures they would not otherwise approve when those measures are temporary or when they have been previously approved by others.

In 1921, John Maynard Keynes and Frank Knight independently insisted on the importance of making a distinction between uncertainty and risk. Keynes referred to matters about which ‘there is no scientific basis on which to form any calculable probability whatever’. Knight claimed that ‘Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated’. Knightian uncertainty exists when people cannot assign probabilities to imaginable outcomes. People might know that a course of action might produce bad outcomes A, B, C, D and E, without knowing much or anything about the probability of each. Contrary to a standard view in economics, Knightian uncertainty is real, and it poses challenging and unresolved issues for decision theory and regulatory practice. It bears on many problems, potentially including those raised by artificial intelligence. It is tempting to seek to eliminate the worst-case scenario, and thus to adopt the maximin rule, which might seem to be the appropriate approach under Knightian uncertainty. But serious problems arise if eliminating the worst-case scenario would (1) impose high risks and costs, (2) eliminate large benefits or potential ‘miracles’ or (3) create uncertain risks.

Compliance with hygiene and other safety measures in the workplace was an important component of society's strategy for reducing infections at the onset of the COVID-19 pandemic, in particular before vaccinations were widely available. We report the results of a field trial of well-established behavioural interventions (social norms, pledging and messenger effects) we implemented to improve compliance with such measures in an occupational setting. We use daily reports of own and other's behaviour to assess the effects of these interventions and supplement these subjective (self-reported) measures with objective data on hand sanitiser usage. The behavioural interventions tested have statistically significant but quantitatively moderate effects on subjective compliance measures and minimal effects on hand sanitiser usage. All effects of our interventions are short-term in nature and dissipate shortly after implementation. Our findings thus provide at most weak support for the notion that typical behavioural interventions can help support compliance with infection prevention measures in the workplace.

This article serves as a commentary on Michael Hallsworth’s 2023 piece, ‘A manifesto for applying behavioural science,’ featured in Nature Human Behaviour. The manifesto was prompted by methodological, practical and normative critiques directed at behavioural science and its role in public policy. In this commentary, I argue that the manifesto presents numerous insightful and constructive reform proposals regarding the scope, methods and values in behavioural science, which can help advance the field of behavioural public policy. While there is much to agree with, I contend in this commentary that applied behavioural science can and should delve deeper into the study of socially and culturally embedded processes of goal formation. Additionally, it should explore the institutional conditions necessary for individuals to formulate their goals competently and in a self-determined manner.

The aim of this article is to better understand how judgements about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment with N = 171 participants to test whether acceptability judgements could be (1) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (2) influenced by the joint framing of the nudge's purpose and effectiveness (in terms of an increase in desirable behaviour versus decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses for all nudge scenarios. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered.

This essay is in celebration of the contributions of Mario Rizzo. I argue that among contemporary economists in the Austrian School of Economics tradition it is Rizzo that advanced, more than his contemporaries, the scientific research program of rational choice as if the choosers were human beings; the dynamic subjectivism and the agony of choice and social interaction; the causal processes and the institutional dynamics that make up a complex social order; and the role of law, politics and civil society in shaping commercial life. In making this argument, I attempt to arbitrage the contributions of two essays of Rizzo’s: ‘Law Amid Flux’ and ‘The Genetic-Causal Tradition and Modern Economic Theory’.

There is growing public concern about the ‘unfairness’ of many pricing practices that have become common in consumer, particularly digital, markets. Industrial and behavioural economists have developed theories that explain the conditions under which these practices are profitable for firms, and their implications for consumer welfare. We identify a mismatch between the welfare economic principles used in this theoretical work and the normative perspective in which these practices are viewed as unfair. We develop a concept of ‘transactional fairness’, grounded in the normative approach of Sugden's Community of Advantage, that is reflective of public concerns. Transactional fairness is complementary to established criteria of economic efficiency and distributional equity but is based entirely on the relationship between individual buyers and sellers. It establishes clear principles with realistic information requirements that are appropriate for compliance by firms. Regulation based on this approach can help to restore public faith in markets.