20 February, 2013

Publication of the week: Nudge

Today's publication of the week is "Nudge: Improving Decisions about Health, Wealth and Happiness" written by Richard H. Thaler, Professor in Economics and Behavioural Science at the Univrsity of Chicago and Cass R. Sunstein, Administrator of the White House Office of Information and Regulatory Affairs.
Behind the rather cheesy title stands a book that is highly interesting both from a private and an academic point of view. Thaler and Sunstein describe how "choice architects" can influence people's behaviour for their own good, say what they eat for lunch in the cafeteria. They advocate "libertarian paternalism", that is they want to influence people for their own good without taking away their liberty to choose something that may be less beneficial to them. In the cafeteria example, this means that desserts are not taken away entirely, but rather put in a place that makes it unlikely for people to choose to eat dessert. "Nudge" is written in a style that many would probably call "popular science", but that makes it easy for us non-economists to understand the basic economic concepts that the authers talk about and it shouldn't be too difficult to read up on the relevant academic literature if necessary.
What has all this to do with researching on EU competition law enforcement? Well, if one can influence people for their own good, should it not be possible to influence companies for their own good?  In my view, competition law is still very much a bastion of Chicago School economics (ironically originating from the same University where Thaler and Sunstein are Professors). Behavioural Economics is therefore only slowly finding its way into academics and enforcers minds. However, it may play quite a role in my PhD project, as I am striving to research how EU competition law enforcement could be improved and that leads me to think that maybe one needs to change the approach to deterring companies from infringing competition law. Speaking of which, I will try to post something more detailed about my project in the near future!

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