The University of Chicago Law School Faculty Blog

Sunstein Interviewed by "The Glenn and Helen Show"

On Monday, Cass Sunstein appeared on the podcast "The Glenn and Helen Show," discussing libertarian paternalism with host Glenn Reynolds of Instapundit.com. You can listen to the podcast here.

Cass Sunstein's Op-Eds on Libertarian Paternalism

Along with the Graduate School of Business' Richard Thaler, his co-author for the book Nudge: Improving Decisions About Health, Wealth, and Happiness, Cass Sunstein recently published two op-eds touching on the topic of that book. The first, in the April 2nd Los Angeles Times, gives a broad overview of the idea of libertarian paternalism that Sunstein and Thaler advance in their book; the other, in the April 6 Chicago Tribune, focuses on how libertarian paternalism might be applied to the problem of climate change. Since Cass' ideas about this topic have come up frequently on this blog (see here, here, here, and most recently here), we thought it might be interesting to let the readers of the Faculty Blog chime in on these pieces.

Edited to Add: Cass and his co-author, Richard Thaler, have a blog on Nudge-related topics that those interested in this topic might enjoy.

Podcast: Eric Posner and Cass Sunstein on "Climate Change Justice"

Greenhouse gas reductions would cost some nations much more than others, and benefit some nations far less than others. Significant reductions would impose especially large costs on the United States, and recent projections suggest that the U.S. has relatively less to lose from climate change. In these circumstances, what does justice require the U.S. to do?

This is the question that the University of Chicago Environmental Law Society and International Law Society invited professors Cass Sunstein and Eric Posner to discuss during a lunchtime talk yesterday. You can listen to their talk here.

One-Click Paternalism

For a number of years, those interested in behavioral economics have been exploring how recent findings about human fallibility might bear on law and public policy. There has been growing interest in various forms of paternalism -- alternately described as light, soft, asymmetrical, and libertarian. For all these approaches, the unifying idea is that private and public institutions might adopt rules that steer people in directions that will make their lives go better while also maintaining freedom of choice. An example is a default rule (say, for savings or for health care) that, if unaltered, helps all or most people; another example is a cooling-off period (say, for encyclopedia sales).

Richard Thaler and I have been working on the topic of paternalism for many years, and have been defending forms of paternalism that preserve freedom of choice. Some libertarians, fearful of government bias or error, have objected that if public officials are involved, paternalism has no legitimate place.

In response to this objection, we have recently become interested in the possibility of "one-click paternalism," embodied in approaches that nudge people in good directions, but that allow essentially costless opt-outs. An example would be an automatic enrollment plan for savings, which workers could reject by a press of a button. Another example would be a default prescription drug plan for seniors, which people could replace with a plan that better suits their needs with a click (or possibly two).

If one-click paternalism provides a useful model, cooling-off periods are a bit more controversial, at least if you can't one-click your way out of them. Thaler and I think that one-click paternalism is often a useful approach for private institutions (employers, rental car companies, cell phone providers) and that the market will produce at least some protection against self-interested or venal nudging.

For government, we think that a form of public nudging is inevitable (short of anarchy), and that in many domains, one-click paternalism is preferable to both the command-and-control regulation favored by many liberals and the laissez-faire approaches favored by many conservatives. (For those interested in a detailed treatment, see our new book on these issues here.)

Conspiracy Theories

All over the world, people accept conspiracy theories. ("The truth is out there.") Many people believe that high-level officials in the United States government were responsible for the assassinations of John F. Kennedy and Martin Luther King. Many people believe that AIDS was deliberately engineered by doctors. Millions of people believe that the attacks of 9/11 were undertaken by the United States or by Israel. Millions of people in the developing world believe that the United States is now plotting to conduct some nefarious campaign against them.

Conspiracy theories create an array of puzzles. What, exactly, are they? What counts as a conspiracy theory? Why do people accept conspiracy theories? Should government do anything about them? Adrian Vermeule and I try to make progress on these questions in a paper that is available here. For the moment, let us notice that a distinctive feature of conspiracy theories is their self-sealing quality: Those who hold such a theory are likely to be both motivated and able to fold contrary evidence into the theory itself, and even to conclude that the contrary evidence is further proof of the conspiracy. Often conspiracy theorists spend much of their time in isolated networks of like-minded others, which makes it all the more difficult to undermine their beliefs.

Some conspiracy theories are innocuous, fun, and funny. (On the innocuous and fun side, consider the parental conspiracies that give rise to widespread beliefs in Santa Claus and the Easter Bunny.) But some such theories are extremely dangerous, because they produce intense feelings of hatred and humiliation, and a real potential for violence. A serious task is to decide when it is worthwhile for government to try to debunk a conspiracy theory -- and to try to find ways to overcome the self-sealing quality of the theory through some form of infiltration.

Video: Cass Sunstein on the 2nd Amendment

Back in November, we posted a podcast of the Cass Sunstein CBI, "The Second Amendment: The Constitution's Most Mysterious Right." In our continuing effort to add more video to the blog, please find below a recording of the the talk (you can also download a Quicktime version here).

Today's Availability Cascade

All of the experts thought that Barack Obama would win the New Hampshire primary. Perhaps more significantly, the prices at Intrade, the political prediction market, suggested that Obama was overwhelmingly likely to win. Many of us have been quite excited about the potential of prediction markets, in which people "bet" on political (and many other) outcomes. Such markets have a terrific track record in politics and elsewhere. And yet Clinton was a huge underdog in New Hampshire. Should we conclude that the prediction markets are unreliable after all? That nobody knows anything? That polls themselves mean nothing?

Sunstein on Extremism and Social Learning

Cass Sunstein (with Harvard's Edward L. Glaeser) recently posted a new paper to SSRN, entitled "Extremism and Social Learning." The abstract is below, and the whole paper is available here.

Extremism and Social Learning 

EDWARD L. GLAESER
Harvard University - John F. Kennedy School of Government - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

CASS R. SUNSTEIN
University of Chicago - Law School December 2007

U of Chicago Law & Economics, Olin Working Paper No. 375
U of Chicago, Public Law Working Paper No. 193

Abstract:    
When members of deliberating groups speak with one another, their predeliberation tendencies often become exacerbated as their views become more extreme. The resulting phenomenon - group polarization - has been observed in many settings, and it bears on the actions of juries, administrative tribunals, corporate boards, and other institutions. Polarization can result from rational Bayesian updating by group members, but in many contexts, this rational interpretation of polarization seems implausible. We argue that people are better seen as Credulous Bayesians, who insufficiently adjust for idiosyncratic features of particular environments and put excessive weight on the statements of others where there are 1) common sources of information; 2) highly unrepresentative group membership; 3) statements that are made to obtain approval; and 4) statements that are designed to manipulate. Credulous Bayesianism can produce extremism and significant blunders. We discuss the implications of Credulous Bayesianism for law and politics, including media policy and cognitive diversity on administrative agencies and courts.

Miles and Sunstein Featured on SCOTUSBlog

Over on SCOTUSBlog, Chicago profs Thomas Miles and Cass Sunstein discuss their article “Do Judges Make Regulatory Policy?: An Empirical Investigation of Chevron” in a two-part SCOTUSBlog "Ask the Author" segment. You can read it here.

The Second Amendment Cascade (?)

Here is a remarkable development. Just twenty-five years ago, there was a strong consensus, among judges and academics, that the Second Amendment did not create an individual right. No federal court had invalidated a restriction on guns on Second Amendment grounds (ever). As recently as 1992, Chief Justice Warren Burger, a conservative Republican appointee, rejected the individual rights view in public.

In a short period, the consensus has shattered. There is a strong possibility that the Supreme Court will accept a view that seemed implausible in the relatively recent past. Here is the question: What has happened?

Consider four possibilities:

1) Truth has finally prevailed. Perhaps new research has shown that the individual rights view is correct. It is true that a large amount of work has been produced in support of that view. Much of it has been funded by private groups with a stake in the issue -- but hardly all of it.

2) Interest groups,  above all the NRA, have spurred the change. Perhaps the new view is a reflection of an aggressive social movement, not unlike the movement to ban segregation and to create a right to same-sex marriage. There can be no doubt that a great deal of time, money, and effort have been expended in an effort, by those with a serious stake, to press the individual rights view on politicians and the federal courts.

3) New judicial appointees have shown new receptivity to arguments that are a) originalist and b) associated with the political right. A key contributor to the shift is undoubtedly the presence, on the federal bench, of a number of Reagan and Bush appointees, who are sympathetic to gun rights in particular, and who also have a jurisprudential interest in originalist arguments.

4) Both politics and law have experienced an informational cascade, produced by savvy "Second Amendment entrepreneurs." Many of those involved in law and politics do not have a lot of private knowledge about the Second Amendment. They must rely on what others think. When others seem to think that the individual rights argument is right, they defer -- at least if they trust those others. On this view, the apparently supportive views of "liberal academics" -- including Sanford Levinson, Akhil Amar, Lawrence Tribe -- have been crucial in legitimating the individual rights position.

I tend to think that all of these explanations provide part of the picture, with the (important) qualification that 1)  is probably wrong. (This is not the place to defend the qualification. The original understanding of the text is very complex, as shown by historians Saul Cornell and Jack Rakove among others; and longstanding social practices and many court of appeals have refused to accept the individual rights interpretation. In my view, the individual rights view, at least in its present form, is mostly a product of contemporary concerns and preoccupations.)  Even if is right, it is not an adequate explanation of what has happened.

If we put 2), 3), and 4) together, we will see that the individual rights interpretation has been the beneficiary, above all, of a stunningly successful social movement. In the domain of constitutional law, there has been nothing even vaguely like it in the past quarter-century.