Behavioral Insights and Public Policy

This chapter introduces the use of behavioral insights in public policy. Beginning with the notion of rationality, it firstly provides an overview of the most relevant concepts and foundational ideas in behavioral science, such as heuristics and cognitive biases, which characterize the behavior of decision-makers as depicted by behavioral models. Secondly, the chapter discusses the application of these concepts to public policy and highlights the incredible success that nudging, as a specific behavioral technique, has achieved in attracting the attention of scholars and practitioners alike. Then, alternative behavioral approaches proposed by the literature are briefly described to capture the broad scope of behavioral public policy. Finally, a methodological note presents randomized control trials (RCTs) as the preferred research method of behavioralists. Whereas RCTs have contributed to making these policy techniques popular, they have their own limitations and are presented here as “the worst methods for causal inference except for all the others.”