When should government mandate labels? When would mandatory labels have desirable consequences for social welfare? How can those consequences be measured? When would labels do more good than harm?

To make a decision about a decision – whether to delegate, whether to take a small step, whether to pick, whether to opt – people need information. They may not be able to obtain all of the information they need, which is one reason that they might make a second-order decision. But they need to know something, which makes it natural to assume that it is good to obtain information. But when, exactly, is information good? There is a great deal of information that people have no interest in receiving. It has no value for them. It clutters the mind. It is boring. In addition, there is a great deal of information that people want not to receive. It is unpleasant. It is painful. In some cases, people do not want to know, in the sense that they have no particular motivation to find out. They will not take active steps to learn. In others, they want not to know, in the sense that they have a particular motivation not to find out. They decide to avoid learning, and they take active steps to avoid that.

Why people do or do not change their beliefs has been a long-standing puzzle. Sometimes people hold onto false beliefs despite ample contradictory evidence; sometimes they change their beliefs without sufficient reason. Here, I propose that the utility of a belief is derived from the potential outcomes of holding it. Outcomes can be internal (e.g., positive/negative feelings) or external (e.g., material gain/loss), and only some are dependent on belief accuracy. Belief change can then be understood as an economic transaction, in which the multidimensional utility of the old belief is compared against that of the new belief. Change will occur when potential outcomes alter across attributes, for example due to changing environments, or when certain outcomes are made more or less salient.

What happens when sustainability concerns clash with the company’s bottom line? On paper, various systems should deter unsustainable behavior: fear of liability (legal sanctions), diminished business opportunities (reputational sanctions), or guilty feelings (moral sanctions). Yet, in reality, companies do not take these legal, reputational, and moral sanctions as given. They rather count on their ability to dilute the expected sanctions. Companies reduce the probability of being caught by controlling the information environment and creating plausible deniability. They are often the ones dictating the public perception of whether they behaved sustainably or not. Companies can also dilute the sanction that is imposed once they are caught, by capturing the regulators, and reducing the guilt associated with immoral behavior. Recognizing that all systems of control can be gamed opens up space for rethinking policy implications, such as designing the legal system in ways that balance the non-legal systems’ areas of malleability.