Sunstein Tapped for Nudger-in-Chief

January 08, 2009 3:48 PM

ABC News' Teddy Davis Reports: President-elect Barack Obama has tapped law professor Cass Sunstein, a former colleague at the University of Chicago who recently moved to Harvard University, to head the Office of Information and Regulatory Policy.

The prolific Sunstein co-authored a book last year, "Nudge," that explains how a "libertarian paternalist" government can preserve freedom of choice while moving its citizens in directions that will improve their lives.

The premise of Sunstein's book, which he wrote with behavioral economist Richard Thaler, is that humans are influenced by the power of inertia.

The paltry U.S. savings rate is one of several ills that Sunstein thinks can be improved by paying attention to "choice architecture".

At present, millions of Americans are given the option of joining employer-based savings p lans but do not exercise the option. Test studies have show, however, that if employers automatically enroll their employees, enrollment rates shoot up dramatically.

"Before he ran for president, I had a discussion with Sen. Obama personally about automatic enrollment," Sunstein told ABCNews.com last year. "He was completely on top of the topic and he understands the behavioral background."

Sunstein would like government to encourage businesses to use automatic enrollment.

Obama went one step further during the campaign and proposed requiring businesses to automatically enroll their employees in savings plans while giving them the choice of opting out.

"As a libertarian paternalist, I personally would not want to mandate it," said Sunstein in a portion of the ABCNews.com interview last year, which was not published at the time.