NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers

B. Douglas Bernheim, Antonio Rangel

NBER Working Paper No. 11518*
Issued in August 2005
NBER Program(s):   HE    PE

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This paper has two goals. First, we discuss several emerging approaches to applied welfare analysis under non-standard ("behavioral") assumptions concerning consumer choice. This provides a foundation for Behavioral Public Economics. Second, we illustrate applications of these approaches by surveying behavioral studies of policy problems involving saving, addiction, and public goods. We argue that the literature on behavioral public economics, though in its infancy, has already fundamentally changed our understanding of public policy in each of these domains.

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