Small and medium-sized enterprises constitute the largest share of companies in most economies. As major resource users and significant contributors to environmental pollution, they are relevant targets for public policy programs aimed at increasing sustainability. We study how ‘sludge’ – small frictions in the choice architecture – can impact the uptake and effectiveness of such public policy programs targeted at SMEs. To this end, we conducted a field experiment within an existing policy program designed to support SMEs in implementing cost-effective environmental management practices. We manipulated the process of receiving free green items intended to support the implementation of those environmentally friendly practices within firms. We find that sludge, in the form of minor additional effort required to order the items, substantially undermined the program’s effectiveness. These results have important implications for policymakers: even minor sludge in the choice architecture can seriously impair the effectiveness of public policy programs targeted at companies.

During the Cold War, logical rationality – consistency axioms, subjective expected utility maximization, Bayesian probability updating – became the bedrock of economics and other social sciences. In the 1970s, logical rationality underwent attack by the heuristics-and-biases program, which interpreted the theory as a universal norm of how individuals should make decisions, although such an interpretation is absent in von Neumann and Morgenstern’s foundational work and dismissed by Savage. Deviations in people’s judgments from the theory were thought to reveal stable cognitive biases, which were in turn thought to underlie social problems, justifying governmental paternalism. In the 1990s, the ecological rationality program entered the field, based on the work of Simon. It moves beyond the narrow bounds of logical rationality and analyzes how individuals and institutions make decisions under uncertainty and intractability. This broader view has shown that many supposed cognitive biases are marks of intelligence rather than irrationality, and that heuristics are indispensable guides in a world of uncertainty. The passionate debate between the three research programs became known as the rationality wars. I provide a brief account from the ‘frontline’ and show how the parties understood in strikingly different ways what the war entailed.

A core normative assumption of welfare economics is that people ought to maximise utility and, as a corollary of that, they should be consistent in their choices. Behavioural economists have observed that people demonstrate systematic choice inconsistences, but rather than relaxing the normative assumption of utility maximisation they tend to attribute these behaviours to individual error. I argue in this article that this, in itself, is an error – an ‘error error’. In reality, a planner cannot hope to understand the multifarious desires that drive a person’s choices. Consequently, she is not able to discern which choice in an inconsistent set is erroneous. Moreover, those who are inconsistent may view neither of their choices as erroneous if the context reacts meaningfully with their valuation of outcomes. Others are similarly opposed to planners paternalistically intervening in the market mechanism to correct for behavioural inconsistencies, and advocate that the free market is the best means by which people can settle on mutually agreeable exchanges. However, I maintain that policymakers have a legitimate role in also enhancing people’s agentic capabilities. The most important way in which to achieve this is to invest in aspects of human capital and to create institutions that are broadly considered foundational to a person’s agency. However, there is also a role for so-called boosts to help to correct basic characterisation errors. I further contend that government regulations against self-interested acts of behavioural-informed manipulation by one party over another are legitimate, to protect the manipulated party from undesired inconsistency in their choices.

Traditionally, corruption is seen as a rational pursuit of profit, focusing on personal gain. However, this view overlooks other influences. This paper focuses on the behavioral aspects of corruption, providing a deeper understanding of its complexities, and addressing the factors overlooked by conventional approaches. Reviewing some of the literature, we highlight how researchers have approached corruption from the perspective of behavioral sciences. Additionally, we examine how the emerging discipline of Behavioral Public Policy (BPP) employs innovative methods to reduce corrupt practices, offering new strategies that transcend traditional perspectives. Our paper innovates by demonstrating how corruption can be reduced by substituting traditional regulations with nonregulatory tools like nudges and sludge audits, or by leveraging digital choice architectures to minimize human-to-human interactions, known corruption enablers. By reducing regulations and administrative red tape, and introducing digital frameworks, these tools simplify processes minimizing opportunities for corrupt behavior. In this paper, we aim to infuse corruption research with a behavioral twist, a digital approach, and a deregulatory perspective, offering policymakers an alternative path to foster transparency, accountability and ethical governance. While this approach will not completely eradicate corruption, it strives to show how BPP can reduce its occurrences.

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.

Since the emergence of psychological and behavioural science, one of its foundational goals has been to explain human behaviour. Although the discipline has been highly successful in this endeavour, there is an elephant in the room. Psychological and behavioural science has neglected studying the most challenging aspect of human behaviour−transformative behavioural change. This change can be described as a fundamental and difficult-to-achieve shift in someone’s actions that involves a transformation of one’s way of living. Understanding transformative behavioural change is essential not only for psychological and behavioural science to accomplish its foundational goal but also to maintain its contemporary relevance. Indeed, it is imminent that both solving the world’s biggest issues (e.g., climate change) and living through major disruptions (e.g., technological revolution) will require people to transform their behaviour. In this perspective, I first review and discuss previous relevant research, and then propose a seven-step agenda for how psychological and behavioural science can become the science of transformative behavioural change.

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.

There are both negative and positive stereotypes about public sector workers. Most studies focus on negative stereotypes, like the idea that public servants are lazy. We, however, do the opposite. We focus on a positive stereotype: public sector workers are seen as caring and helpful. We test the effects of positive stereotypes on the quality of public service delivery. Using a pre-registered audit experiment in elderly care in the Netherlands and Belgium, we find that activating a pro-social stereotype does not affect the outcome of public service quality in terms of response rate and information provision. However, it does improve the bureaucratic process: public sector workers are friendlier toward citizens. They say around 12% more ‘thank you’ in their replies. Moreover, the citizens’ gender affects the response rate: female citizens receive around 10% more replies. Concluding, we show that positive stereotyping can improve parts of the quality of public service delivery but not all.

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.

To what extent can the harms of misinformation be mitigated by relying on nudges? Prior research has demonstrated that non-intrusive ‘accuracy nudges’ can reduce the sharing of misinformation. We investigate an alternative approach. Rather than subtly reminding people about accuracy, our intervention, indebted to research on the bystander effect, explicitly appeals to individuals' capacity to help solve the misinformation challenge. Our results are mixed. On the one hand, our intervention reduces the willingness to share and believe in misinformation fact-checked as false. On the other hand, it also reduces participants' willingness to share information that has been fact-checked as true and innocuous, as well as non-fact-checked information. Experiment 1 offers proof of concept; Experiment 2 tests our intervention with a more realistic mix of true and false social media posts; Experiment 3 tests our interventions alongside an accuracy nudge. The effectiveness of our intervention at reducing willingness to share misinformation remains consistent across experiments; meta-analysis reveals that our treatment reduced willingness to share false content across experiments by 20% of a scale point on a six-point scale. We do not observe the accuracy nudge reducing willingness to share false content. Taken together, these results highlight the advantages and disadvantages of accuracy nudges and our more confrontational approach.

The heart of prospect theory is the value function, proposing that the carriers of value are positive or negative changes from a reference point. Daniel Kahneman observed that if prospect theory had a flag, the value function would be drawn on it. The function is nonlinear, reflecting diminishing sensitivity to magnitude. When describing how human lives are valued, the function exposes profound incoherence. An individual life is highly valued and thus vigorously protected if it is the only life at risk. But that life loses its value when it is one of many endangered by a larger tragedy. Beyond this insensitivity, the function may actually decline when many lives at risk become mere numbers. The more who die, the less we care. Implications of this deadly ‘arithmetic of compassion’ for understanding and managing the risk from nuclear weapons are briefly discussed.

To improve public health and promote environmental sustainability, widespread dietary changes are necessary in high-income countries. However, adopting and maintaining dietary goals is challenging and requires repeated self-regulation. Effective public policies can facilitate healthy food choices and reduce the likelihood of goal failure. This study examines the relationship between individuals’ dietary goal failures and their acceptance of public food policies, using data from an experience-sampling study (Ni = 409 and Nobs = 6,447). Regression analyses revealed that participants who experienced more frequent dietary goal failures were generally less accepting of health-promoting food policies and perceived them as less effective. Additionally, perceived policy effectiveness positively predicted policy acceptance. Exploratory analyses showed that the negative relationship between dietary goal failure and food policy acceptance varied depending on the type of intervention (pull policies vs push policies) and the location of food selections (home vs out-of-home). Notably, we found a positive relationship between dietary goal failure and acceptance of pull policies for food selections made out-of-home. These findings highlight the importance of better understanding the complex interplay between public policy attitudes, the food environment and adherence to dietary goals.

Many moral judgments are rooted in the outrage heuristic. In making such judgments about certain personal injury cases, people's judgments are both predictable and widely shared. With respect to outrage (on a bounded scale of one to six) and punitive intent (also on a bounded scale of one to six), the judgments of one group of six people, or 12 people, nicely predict the judgements of other groups of six people, or 12 people. Moreover, outrage judgments are highly predictive of punitive intentions. Because of their use of the outrage heuristic, people are intuitive retributivists. People care about deterrence, but they do not think in terms of optimal deterrence. Because outrage is category-specific, those who use the outrage heuristic are likely to produce patterns that they would themselves reject, if only they were to see them. Because people are intuitive retributivists, they reject some of the most common and central understandings in economic and utilitarian theory. To the extent that a system of criminal justice depends on the moral psychology of ordinary people, it is likely to operate on the basis of the outrage heuristic and will, from the utilitarian point of view, end up making serious and systematic errors.

In March 2024, Daniel Kahneman – the man who did perhaps more than anyone else to shape the field of behavioural public policy – died. He is among a small handful of scholars who have had a huge effect on my own career, and in this essay – the first in a series of essays in a special section of the Journal that honour him – I reflect on how his work inspired much of my own.

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.

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.

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.

Kahneman and Tversky's ‘Prospect Theory’ paper famously demolishes expected utility theory as a predictive device. However, it presents deviations from that theory as ‘normatively unacceptable’ and argues that decision-makers would normally correct them when possible. In a later paper, Kahneman rejects a similar argument (the ‘discovered preference’ hypothesis) advanced by Plott. Later still, Kahneman endorses Sunstein and Thaler's ‘libertarian paternalism’, which aims to help people avoid deviating from their ‘true’ preferences. I report an email correspondence between Kahneman and me in which we debated whether his position on libertarian paternalism was consistent with his critique of Plott's hypothesis.