Choice: Myopic and Rational

Avner Offer

in The Challenge of Affluence

Published in print November 2007 | ISBN: 9780199216628
Published online October 2011 | e-ISBN: 9780191696015 | DOI:

Series: The Challenge of Affluence

Choice: Myopic and Rational

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Choice is inconsistent, and finding a good balance is a dilemma. In competitive market societies, the flow of novelty and innovation undermines existing conventions, habits, and institutions of commitment. It reinforces a bias for the short term. To secure commitment, people accept a great deal of voluntary restraint and even compulsion. A large trend of the twentieth century has been the growth of active government and regulation. Voters have narrowed their own freedom of choice and surrendered control of their futures to social agencies. This trust in government was not always justified, but it has not been forfeited either. The problem of commitment is difficult, and there are no other agents sufficiently accountable or credible to secure it. This chapter argues that the government is the commitment agent of last resort, and frequently of first resort as well.

Keywords: market; regulation; active government; choice; competition

Chapter.  6429 words.  Illustrated.

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