The Bias Bias in Behavioral Economics

In its portrayal, people have systematic cognitive biases that are not only as persistent as visual illusions but also costly in real life—meaning that governmental paternalism is called upon to steer people with the help of “nudges.” A systematic review of the literature shows little evidence that the alleged biases are potentially costly in terms of less health, wealth, or happiness. Getting rid of the bias bias is a precondition for psychology to play a positive role in economics.

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