Exploiting personal biases to influence people's behavior was always a bad idea. Instead, governments and companies should find better ways to communicate risks.
Behavioral economics is facing a reckoning.
For a few decades, the idea of applying human psychology to economics made a dry subject hip and relatable. Before, the field seemed out of touch, full of abstract models that started with the assumption that people would act rationally based on a universal desire to make widgets and get more stuff.
But along came a generation of economists and psychologists with tales of how crazy we all are and how bad we are at understanding risk. The seductive implication was that wise technocrats could use this knowledge to shepherd the irrational masses into better, or at least commercially viable, behavior.
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
This piece originally appeared in Bloomberg Opinion