Oh, Behave!

And this from an old article by Stephen Dubner:

"Behavioral economics offers powerful tools to achieve policy goals," he told the conference. "And libertarian paternalism is an attractive approach to solving policy problems. What else? I think the only other alternative is inept neglect."

Mr. Thaler has concluded that too many people, no matter how educated or vigilant, are poor planners, inconsistent savers and haphazard investors. His solution: public and private institutions should gently steer individuals toward more enlightened choices.

http://stephenjdubner.com/journalism/behavioris...

You might also be interested in this from a recent article in the New Yorker:

Today, most economists agree that, left alone, people will act in their own best interest, and that the market will coordinate their actions to produce outcomes beneficial to all.

Neuroeconomics potentially challenges both parts of this argument. If emotional responses often trump reason, there can be no presumption that people act in their own best interest. And if markets reflect the decisions that people make when their limbic structures are particularly active, there is little reason to suppose that market outcomes can’t be improved upon.

http://www.newyorker.com/fact/content/articles/...