"Neuroeconomics, Behavioral Economics and the Political Economy of Nudge." IAMCR, 2017.

Conference Paper
Oscar H. Gandy, Jr. and Selena Nemorin

Transformations in the strategies and techniques of governmentality have been implemented around the globe through different versions of behavioral interventions being characterized as “nudges.” Although the variety of areas in which the structuration of this so-called “libertarian paternalism” will occur is considerable, this paper will focus on the implementation of these practices within geopolitical areas being referred to as “smart cities.”

Informed by earlier assessments of technologically based theories of communication and social change by Preston, this paper will briefly examine the relationships between technological advances in neuroscience associated with increasingly sophisticated brain scanning technology. It will then examine the impact of these and related technological developments on neuroeconomics and behavioral economics as foundational contributions to the governance of smart cities.

Because of the resonance between these developments and transformations in several areas of governmentality explored by Foucault in the 1970s, and by an increasing number of theorists of late, this paper sets out a program of research and policy analysis organized through the political economy of communications framework laid out by Mosco. Through an emphasis on the contributions to behavioral economics made by Thaler and Sunstein, smart city governance will be identified and assessed in terms of the processes of Commodification, Spatialization and Structuration as defined by Mosco. Part of what is being commodified in support of nudging policies implemented through public/private partnerships are the networked devices that capture cognitive, affective and behavioral information which are being used to alter strategies and targets of contemporary and emergent forms of correct training.

This paper also identifies the dominant firms operating in this rapidly evolving sector, including network providers such as Oracle, and those providing resources for advanced computing and analytics like Microsoft and IBM. For example, in our analysis of spatialization, these initiatives will be characterized in part by the frameworks being developed for implementation within The Political Economy of Nudge 3 targeted areas and populations through which nudges, varying in intensity and levels of constraint will be delivered, evaluated and altered.

In this emergent governance arena, multiple forms of transaction-generated, and remotely sensed information about persons, devices and the relations between them will be subject to analysis by a variety of interested actors. Information derived from these analyses will play a critical role in the design, management and evaluation of nudges, some of which will be used to exploit, rather than to overcome common limitations in consumer decision-making.

The implications of this process for groups within society, especially those already disadvantaged by poverty, segregation and disregard, will be described, and illustrated with examples from around the globe. The paper will conclude with an articulation of public policy concerns, including those related to privacy and surveillance that will call for an organized response at the political level.

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