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De overheid als keuzearchitect? - Wetenschappelijke Raad voor het ...

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public policy nudges: the government as choice architect<br />

Why shouldn’t they share that data with us so we can become intelligent<br />

shoppers? Now one of the advantages of this kind of approach<br />

is that the alternative is regulation, and regulation is a never-ending<br />

game. So for example, I just read an article that in Australia a couple<br />

of years ago they regulated how much a credit card can charge<br />

merchants for using this card. They cut those fees in half. What has<br />

been happening over the last few years is that credit card companies<br />

are introducing more and more ingenious ways of charging you for<br />

things. In America we call this the whack’em game, where you knock<br />

something down and something else pops up. The kind of disclosure<br />

rules I am talking about, would end that game because all the ways<br />

they charge you would be transparent.<br />

Let me end with a comment about the financial crisis. Alan Greenspan<br />

gave a famous ‘mea culpa’ speech, where he said he was<br />

shocked. Like the character in Casablanca, he was shocked that the<br />

people in the financial markets were not paying enough attention to<br />

counterparty risks. And he was <strong>als</strong>o shocked that the smartest financial<br />

institutions in the world were viewing mortgage securities as a<br />

steal. And in his world view they were econs, super econs and would<br />

not make this kind of mistake. Here is my take on the financial crisis.<br />

I think two of the mistakes I have been talking about today are important<br />

to understanding what happened. One is bounded rationality.<br />

So the crisis started with people in places like Las Vegas, Phoenix and<br />

Miami taking out mortgages that were complicated, and which they<br />

could only really pay back if real estate prices kept going up. It is not<br />

surprising to anybody really that some people will not understand a<br />

complicated mortgage. So the bounded rationality of the borrowers<br />

is not surprising. What is surprising is that this bounded rationality<br />

worked all the way up, to the ceo’s of major financial institutions.<br />

What they did not understand is what their traders were doing. So<br />

you know, you have companies like Bear Sterns and aig and Lehman<br />

Brothers, that were essentially brought down or greatly shrunk by<br />

the behavior of a very small part of the organization that was engaged<br />

in trading practices that the ceo’s could not understand. So we have<br />

bounded rationality all the way from the bottom to the top. The second<br />

key thing that I would point to is self control problems. Again, it<br />

started the crisis with people. Most of the mortgages were refinances.<br />

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