In this paper, we revisit the Knowledge Problem addressed by Hayek eight decades ago and emphasised more recently by Rizzo and Whitman in their critique of the new paternalist approach of mainstream behavioural economics promoted by Sunstein and Thaler. We do this in light of the work of Michael Polanyi. Polanyi developed a theory of knowledge which has some commonalities with Hayek’s but also departs from it by emphasising the tacit, personal and perceptual dimensions of any process of knowing, thus radically renouncing any attempt of a knowledge typology separating different types of tacit knowledge (TK) and even denying that general knowledge could exist independently of TK.

In the philosophy of mind and cognitive science, there is a pronounced paradigm shift associated with the transition from internalism to externalism. The externalist paradigm views cognitive processes as not isolated in the brain, but as interrelated with external artefacts and structures. The paper focuses on one of the leading externalist approaches – extended cognition. Despite the dominance of internalism in economics, in its main schools, there is an emerging trend towards extended cognition ideas. In my opinion, economists might develop the most advanced version of the extended cognition approach: socially extended cognition based on cognitive institutions. This paper analyses extended cognition ideas in institutional, Austrian, and behavioural economics and identifies numerous overlapping approaches and complementary research areas. I argue that the economics of cognitive institutions is a promising field for all economic schools and propose a preliminary research agenda.

Psychological and cultural evolutionary accounts of human sociality propose that beliefs in punitive and monitoring gods that care about moral norms facilitate cooperation. While there is some evidence to suggest that belief in supernatural punishment and monitoring generally induce cooperative behaviour, the effect of a deity's explicitly postulated moral concerns on cooperation remains unclear. Here, we report a pre-registered set of analyses to assess whether perceiving a locally relevant deity as moralistic predicts cooperative play in two permutations of two economic games using data from up to 15 diverse field sites. Across games, results suggest that gods’ moral concerns do not play a direct, cross-culturally reliable role in motivating cooperative behaviour. The study contributes substantially to the current literature by testing a central hypothesis in the evolutionary and cognitive science of religion with a large and culturally diverse dataset using behavioural and ethnographically rich methods.

The environmental assessment literature has neglected the distorting effect of cognitive and unconscious motivational biases (CUMB) in environmental assessment processes. This is problematic because CUMB are present in most, if not all, decision-making situations and can significantly distort decision-making processes. This article assesses how debiasing techniques are, or should be, incorporated in (supra)national environmental assessment legislation. The Dutch case study undertaken for this article shows that EU and Dutch legislation do not sufficiently incorporate debiasing techniques to ensure sound environmental decision making. Furthermore, the extent to which Dutch legislation incorporates debiasing techniques was found to be decreasing. Based on these findings, the article presents ways to incorporate debiasing techniques in environmental assessment legislation more generally, and in EU and Dutch legislation in particular.

Are human beings irredeemably irrational? If so, why? In this article, I suggest that we need a broader appreciation of thought and reasoning to understand why people get things wrong. Although we can never escape cognitive bias, learning to recognize and understand it can help us push back against its dangers – and in particular to do so collectively and collaboratively.

Behavioural science has made significant contributions to public policy over the last decade from tax compliance to pensions and energy use. However, behavioural insights (BI) have not yet been able to claim significant policy shifts in the area of crime, despite increasing interest and experimentation. This paper offers a critical reflection on the state of BI and crime from the perspective of those who have been at the forefront of this work since the inception of the world's first behavioural science team in government. We outline how existing theories of crime have already laid foundations for the successful application of BI but identify opportunities to build on these with tools from behavioural science. We conclude by examining how continued cross-pollination of ideas between BI and disciplines such as applied criminology points to promising directions for future research.

Behavioural economists often claim that their policy recommendations are justified by cost–benefit analysis (CBA), but without adequate explanation of the methodology they have in mind. I sketch the outlines of a CBA methodology that is compatible with the findings of behavioural economics and is in accord with my account in Sugden (2018) of a well-functioning market as a network of opportunities for mutually beneficial transactions. The key idea is that the CBA of a project is concerned only with effects that are not transmitted through voluntary interactions. I illustrate this proposal by considering the appraisal of fuel economy mandates.

Behavioural economics research has pointed to the importance of market inefficiencies, framing, heuristics and hyperbolic discounting. Empirically, behavioural economics has been shown to predict patterns of consumer behaviour, exercise patterns and substance addiction. In this article, I discuss the ways in which our growing understanding of behavioural economics has shaped the development of public policies. I conclude with six pieces of advice for behavioural policymakers.

Why does human cooperation often unravel in economic experiments despite a promising start? Previous studies have interpreted the decline as the reaction of disappointed altruists retaliating in response to non-altruists (Conditional Cooperators hypothesis). This interpretation has been considered evidence of a uniquely human form of cooperation, motivated by an altruistic concern for equality (‘fairness’) and requiring special evolutionary explanations. However, experiments have typically shown individuals not only information about the decisions of their groupmates (social information) but also information about their own payoffs. Showing both confounds explanations based on conditional cooperation with explanations based on confused individuals learning how to better play the game (Confused Learners hypothesis). Here we experimentally decouple these two forms of information, and thus these two hypotheses, in a repeated public-goods game. Analysing 616 Swiss university participants, we find that payoff information leads to a greater decline, supporting the Confused Learners hypothesis. In contrast, social information has a small or negligible effect, contradicting the Conditional Cooperators hypothesis. We also find widespread evidence of both confusion and selfish motives, suggesting that human cooperation is maybe not so unique after all.

Since the publication of the seminal book Nudge by Thaler and Sunstein, several critics have highlighted preference endogeneity as a serious obstacle to nudging. When individuals hold preferences that are dynamic and endogenous to the nudge frame, it is unclear what the normative benchmark for libertarian paternalistic policies should be. While acknowledging this issue, the pro-nudging camp has not yet sufficiently addressed it. This article aims to fill this void by presenting a conditional defence of nudging when preferences are endogenous. We explain the learning process through which individuals establish ‘agentic’ preferences: preferences that are sufficiently stable, reasonable, autonomous and associated with organismic well-being to ground the ‘welfare’ principle of libertarian paternalism. To describe this process, we draw on theories from psychological science, in particular self-discrepancy theory and self-determination theory. We argue that agentic preferences are not only welfare-relevant and thus appropriate to libertarian paternalism but can also be identified by choice architects.

Many proponents of behavioural public policy work within a broadly consequentialist framework. From this perspective, the ultimate aim of public policy is to maximise utility, happiness, welfare, the satisfaction of preferences, or similar; and the behavioural aspect of public policy aims to harness a knowledge of human psychology to make this maximisation more effective. In particular, behavioural insights may be crucial to help policy-makers ‘save us from ourselves’ by helping citizens avoid falling into non-rational choices, for example, through framing effects, failures of will-power, and so on. But an alternative reading of the psychological literature is that human thoughts and actions are not biased from a rational standard, but are simply systematically inconsistent. If so, then utility and similar notions are not well defined either for individuals or as an objective of public policy. I argue that a different, contractarian viewpoint is required: that the determination of public policy is continuous with the formation of agreements we make with each other at all scales, from momentary social interactions, to linguistic and social conventions, to collective decisions by groups and organisations. Behavioural factors do not over-ride, but can (among many other factors) inform, our collective decision-making process. The point of behavioural insights in public policy is primarily to inform and enrich public debate when deciding the rules by which we should like to live.

Populations' diets typically fall short of recommendations. The implication of this on ill health and quality of life is well established, as are the subsequent health care costs. An area of growing interest within public health nutrition is food choice architecture; how a food choice is framed and its influence on subsequent food selection. In particular, there is an appeal to manipulating the choice architecture in order to nudge individuals' food choice. This review outlines the current understanding of food choice architecture, theoretical background to nudging and the evidence on the effectiveness of nudge strategies, as well as their design and implementation. Interventions emphasising the role of nudge strategies have investigated changes to the accessibility, availability and presentation of food and the use of prompts. Empirical studies have been conducted in laboratories, online and in real-world food settings, and with different populations. Evidence on the effectiveness of nudge strategies in shifting food choice is encouraging. Underpinning mechanisms, not yet fully explicated, are proposed to relate to salience, social norms and the principle of least effort. Emerging evidence points to areas for development including the effectiveness of choice architecture interventions with different and diverse populations, and the combined effect of multiple nudges. This, alongside further examination of theoretical mechanisms and guidance to engage and inspire across the breadth of food provision, is critical. In this way, the potential of choice architecture to effect meaningful change in populations' diets will be realised.