Libertarian Paternalism

You just moved into a new apartment. It’s clean and cool, and the smart thermostat is pre-set to an energy-efficient temperature. It’s a bit lower than you usually set it, but it’s actually pretty comfortable (and it’s fun to bundle up and be cozy), so you never end up changing it. Months later, you realize your energy bill is lower, and your carbon footprint is too. You weren’t forced to conserve energy. You could’ve cranked up the heat, but the default setting nudged you to do the right thing—for yourself and the planet.

That’s libertarian paternalism in action, a policy approach that seeks to influence individuals’ behavior in ways that will improve their lives, as judged by themselves, while preserving their freedom to choose. It might seem strange to imagine how those two words could ever coexist, but they do. The concept weaves together economics, psychology, and public policy, and the ethics of its implementation are widely debated. It uses insights from behavioral economics, such as cognitive biases and decision-making heuristics, to design nudges that steer people toward better outcomes without restricting any options or imposing mandates. It's about designing a world where the healthy, smart choices are the easiest ones, but never the only ones, to make.