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Condorcet’s Jury Theorem as a Rational Justification of Soft Paternalistic Consumer Policies

A Philosophical Note

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Nudging - Possibilities, Limitations and Applications in European Law and Economics

Part of the book series: Economic Analysis of Law in European Legal Scholarship ((EALELS,volume 3))

Abstract

The aim of this note is to revisit the meaningfulness of the Condorcet Jury Theorem (CJT) and apply it to the recent debate on liberal paternalism and consumer protection. The CJT consists of two parts, (a) stating that a jury of experts is always more competent than a single expert given a certain level of competence, and (b) asserting that for large juries, the collective competence approaches infallibility. This note argues that these insights suggest the application of a Condorcet jury voting procedure in case of nudging boundedly rational consumers. The note proposes a simple calculus for finding an optimal jury size and advocates consumers’ meta-preferences as the jury’s evaluative dimension for designing soft paternalistic policies.

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Notes

  1. 1.

    Thaler and Shefrin 1981, p. 39.

  2. 2.

    Kahneman 2011.

  3. 3.

    Camerer et al. 2004; Rabin 2002.

  4. 4.

    Armstrong and Vickers 2012.

  5. 5.

    Sunstein and Thaler 2003; Thaler and Sunstein 2003, 2008.

  6. 6.

    Sunstein and Thaler 2003, p. 1190.

  7. 7.

    Glaeser 2006.

  8. 8.

    Rizzo and Whitman 2009; Schnellenbach 2012; Sugden 2008.

  9. 9.

    Kaniovski 2010; Kaniovski and Zaigraev 2011; Peleg and Zamir 2012.

  10. 10.

    Hausman and Welch 2010.

  11. 11.

    Grüne-Yanoff 2009, 2012; Mitchell 2005.

  12. 12.

    Holler 2015.

  13. 13.

    Glaeser 2006; Schnellenbach 2012.

  14. 14.

    Rizzo and Whitman 2009; Schnellenbach 2012; Sugden 2008.

  15. 15.

    Sunstein and Thaler 2003, p. 1162.

  16. 16.

    Sugden 2008.

  17. 17.

    Rizzo and Whitman 2009.

  18. 18.

    Hayek 1945, p. 519.

  19. 19.

    Camerer et al. 2003.

  20. 20.

    See, for one, Grofman and Feld 1988.

  21. 21.

    Sunstein 2014, p. 61.

  22. 22.

    Grofman et al. 1983.

  23. 23.

    Grofman et al. 1983.

  24. 24.

    Kirstein and Wangenheim 2010.

  25. 25.

    Kaniovski 2010. See also Berg 1993, Ladha 1993 or Peleg and Zamir 2012 for an in-depth discussion of the criterion of independence.

  26. 26.

    Berg 1996.

  27. 27.

    Feddersen and Pesendorfer 1998.

  28. 28.

    Grofman et al. 1983; Berg 1996.

  29. 29.

    Guarnaschelli et al. 2000, p. 413.

  30. 30.

    Ladha et al. 1996.

  31. 31.

    Black 1958; Grofman and Feld 1988; List and Goodin 2001; Miller 1986.

  32. 32.

    This idea is based on Calabresi’s seminal work The Costs of Accidents (1970) which deals with efficiency analysis of tort law. Therein, Calabresi argues that the goal of tort law is the minimization of total expected accident costs, which include both the expected costs of the accidents and the spent costs for avoiding the accidents.

  33. 33.

    Sunstein 2015, p. 18.

  34. 34.

    Gigerenzer 2014.

  35. 35.

    Darby 2006.

  36. 36.

    For example in form of the well-known FLO International’s Fairtrade certification.

  37. 37.

    Loureiro and Lotade 2005.

  38. 38.

    The individual with “complete information , unlimited cognitive abilities, and no lack of willpower” is the normative benchmark individual for Thaler and Sunstein 2003, p. 176.

  39. 39.

    Frankfurt 1971; Thaler and Shefrin 1981.

  40. 40.

    Thaler and Shefrin 1981, p. 39.

  41. 41.

    Kahneman 2011.

  42. 42.

    Strack and Deutsch 2004.

  43. 43.

    Mueller et al. 2010.

  44. 44.

    On the importance of pleasure, see Dolan 2014.

  45. 45.

    Schnellenbach 2012.

  46. 46.

    Mueller et al. 2010. Sunstein 2015.

  47. 47.

    Sunstein 2015.

  48. 48.

    Kirchgässner 2014, p. 15.

  49. 49.

    Kirchgässner 2013.

  50. 50.

    For empirical arguments backing the existence of stable long-term preferences , see: Kahneman 2003, or Strack and Deutsch 2004.

  51. 51.

    For an in-depth discussion on how to identify meta-preferences, see Beshears et al. (2008). The authors identify six approaches that jointly contribute to the identification of, what they call, normative preferences: structural estimation, active decisions, asymptotic choice, aggregated revealed preferences, reported preferences and informed preferences.

  52. 52.

    Camerer et al. 2003; Thaler and Sunstein 2008.

  53. 53.

    Fehr and Singer 2005; Singer and Hein 2012.

  54. 54.

    Thaler and Sunstein 2003, 2008.

  55. 55.

    Kaniovski 2010.

  56. 56.

    Holler and Leroch 2010.

  57. 57.

    See also Sunstein 1999.

  58. 58.

    Guarnaschelli et al. 2000; Ladha 1996.

  59. 59.

    Brock 2011.

  60. 60.

    Marteau et al. 2011.

  61. 61.

    WHO 2008; Willis 2011.

  62. 62.

    Jolls 2013.

  63. 63.

    Johnson et al. 2002.

  64. 64.

    Armstrong and Vickers 2012.

  65. 65.

    Dold and Holler 2015.

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Acknowledgement

I thank Manfred J. Holler for an in-depth discussion on the draft of the paper and I am grateful for the valuable comments of Christian Schubert, Jan Schnellenbach and the participants of the 4th Law and Economics Conference in Lucerne on Nudging . All errors, of course, remain mine.

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  1. Albert-Ludwig University Freiburg, Freiburg i. Br., Germany

    Malte Frederic Dold M.A.

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Correspondence to Malte Frederic Dold M.A. .

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  1. Faculty of Law, University of Lucerne, Lucerne, Switzerland

    Klaus Mathis

  2. Notre Dame Law School, University of Notre Dame, Notre Dame, Indiana, USA

    Avishalom Tor

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Dold, M.F. (2016). Condorcet’s Jury Theorem as a Rational Justification of Soft Paternalistic Consumer Policies. In: Mathis, K., Tor, A. (eds) Nudging - Possibilities, Limitations and Applications in European Law and Economics. Economic Analysis of Law in European Legal Scholarship, vol 3. Springer, Cham. https://doi.org/10.1007/978-3-319-29562-6_4

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