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aausch comments on Disclosure vs. Bans: Reply to Robin Hanson - Less Wrong
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So, if the average consumer is not aware of the effects of hyperbolic discounting, and of how to counter them, then we have an information imbalance, which can be rectified by passing laws which prohibit contracts from taking advantage of this bias.
If it were only ignorance that were the problem, the Government could simply inform people about hyperbolic discounting.
Furthermore, this would be an incredibly broad set of laws: virtually every aspect of our lives is sub-optimal because of hyperbolic discounting. Given that these terms and conditions aren’t even unpopular ex ante, the general application of this principle would permit virtually any legislation to be enacted; and given public choice theory, they probably would be. I’m pretty sure that every lobbying group could pretty quickly translate its grievances into ones about hyperbolic discounting: feminists, environmentalists & religious moralists spring to mind immediately.
Hyperbolic discounting may be a big problem (the big problem?), but even ignoring regulatory capture, I don’t think legislation is the answer.