Constitutional Political Economy

, Volume 19, Issue 3, pp 226–248 | Cite as

Why incoherent preferences do not justify paternalism

  • Robert SugdenEmail author
Original Paper


A variety of recent arguments emerging from behavioural economics claim to undermine the credibility, and even the conceptual coherence, of the economist’s traditional rejection of paternalism. Indeed, some suggest that the incoherent nature of preferences inevitably implies a form of paternalism, since some basis for officiating between expressed preferences is required, and some preferences will be over-ridden in favour of others. This paper reviews and contests these arguments. It argues that markets operate according to a normatively defensible and non-paternalistic principle of mutual advantage, and that this principle does not require preferences to be coherent.


Paternalism Preferences Behavioural economics 

JEL Classification




I thank Ben McQuillin and Richard Thaler for comments on previous versions of this paper. My work has been supported by the Economic and Social Research Council of the UK (award no. RES 051 27 0146).


  1. Bernheim, D., & Rangel, A. (2007). Toward choice-theoretic foundations for behavioral welfare economics. Discussion paper, Resources for the Future, Washington, D.C.Google Scholar
  2. Buchanan, J. M. (1968). The demand and supply of public goods. Chicago: Rand McNally.Google Scholar
  3. Camerer, C., Issacharoff, S., Loewenstein, G., O’Donaghue, T., & Rabin, M. (2003). Regulation for conservatives: Behavioral economics and the case for ‘asymmetric paternalism’. University of Pennsylvania Law Review, 151, 1211–1254.CrossRefGoogle Scholar
  4. Hayek, F. A. (1945). The use of knowledge in society. American Economic Review, 35, 519–530. Page references to the reprinted version in Friedrich Hayek. (1948). Individualism and economic order. Chicago University Press.Google Scholar
  5. Nagel, T. (1986). The view from nowhere. Oxford: Oxford University Press.Google Scholar
  6. Savage, L. J. (1954). The foundations of statistics. New York: Wiley.Google Scholar
  7. Schelling, T. (1978). Egonomics, or the art of self-management. American Economic Review, Papers and Proceedings, 74, 1–11.Google Scholar
  8. Scitovsky, T. (1976). The joyless economy: The psychology of human satisfaction. Oxford: Oxford University Press.Google Scholar
  9. Sugden, R. (2004). The opportunity criterion: Consumer sovereignty without the assumption of coherent preferences. American Economic Review, 94(September 2004), 1014–1033.CrossRefGoogle Scholar
  10. Sugden, R. (2007). The value of opportunities over time when preferences are unstable. Social Choice and Welfare, 29, 665–682.CrossRefGoogle Scholar
  11. Sunstein, C., & Thaler, R. (2003a). Libertarian paternalism. American Economic Review, Papers and Proceedings, 93(2), 175–179.Google Scholar
  12. Sunstein, C., & Thaler, R. (2003b). Libertarian paternalism is not an oxymoron. University of Chicago Law Review, 70, 1159–1202.CrossRefGoogle Scholar
  13. Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics, 106, 1039–1061.CrossRefGoogle Scholar
  14. Wicksell, K. (1896/1958). A new principle of just taxation. In R. Musgrave & A. Peacock (Eds.), Classics in the theory of public finance. London: Macmillan. Original publication in German.Google Scholar

Copyright information

© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  1. 1.School of EconomicsUniversity of East AngliaNorwichUK

Personalised recommendations