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Cass R. Sunstein, Behavioral Biases, Choice Engines, and Paternalistic AI (2023).


Abstract: Many consumers suffer from inadequate information and behavioral biases, which can produce internalities, understood as costs that people impose on their future selves. In these circumstances, “Choice Engines,” powered by Artificial Intelligence (AI), might produce significant savings in terms of money, health, safety, or time. Consider, for example, choices among motor vehicles or appliances. Choice Engines might also take account of externalities, and they might nudge or require consumers to do so as well. Different consumers care about different things, of course, which is a reason to insist on a high degree of freedom of choice, even in the presence of internalities and externalities. It is important to emphasize that Choice Engines and AI might be enlisted by insufficiently informed or self-interested actors, who might exploit inadequate information or behavioral biases, and thus reduce consumer welfare. It is also important to emphasize that Choice Engines and AI might show behavioral biases, perhaps the same ones that human beings are known to show, perhaps others that have not been named yet, or perhaps new ones, not shown by human beings, that cannot be anticipated.