This paper aims to examine whether libertarian paternalism(LP) reflects the
ideas of behavioral economics and to compare it with the doctrine of
laissez-faire(LF). Due to its preoccupation with setting the default value, LP
fails to highlight the concepts of reference-dependence and context-specificity.
LP differs from LF in its reliance on so-called “nudges” as a form of
intervention, despite their common adherence to individuals’ freedom to
choose. Moreover, LP may propose regulating advertisements on the part of
firms to exploit consumers’ imperfect rationality and thus may criticize
market-based economies. Furthermore, LP may make allowances for social
factors, as exemplified by Sunstein.