Is Behavioral Economics the Death of Living Wills?

As a physician who conducts research on decision-making, I have been asked many times: What does behavioral economics teach us about the role of living wills in medical care? Famed behavioral economist Dick Thaler recently opined on this topic in the New York Times, stating his support for a “requirement that all patients meet with their doctors or trained end-of-life counselors and prepare living wills.” He believes patients will be better off if they “talk about the trade-offs and make some choices before they are incapable of doing so.”
I respect Thaler a great deal. His thinking and research on how to promote retirement saving is an absolutely brilliant line of work, and perhaps one of the best examples of how behavioral economic discoveries can improve people’s lives. I wish he had been chosen to share the Nobel Prize with Danny Kahneman, when the prize was awarded for Kahneman’s (and Tversky’s) work laying the foundation for behavioral economics. I think Thaler is that important of a figure in the field.
But his enthusiastic embrace of living wills is surprisingly naïve. He should have known better. For starters, Thaler is one of the people who have discovered some of the psychological forces that lead people to make bad decisions. Give someone a complicated choice, with lots of trade-offs, and Thaler could fill the semester explaining how and why that decision is likely to go wrong. Indeed, early developers of the living will went to elaborate lengths to create documents that describe the exact situations patients might encounter in the future. In order to account for all the possible scenarios, some of these forms look more complicated than a wealthy person’s tax returns. No one with a basic understanding of human psychology could think these forms would lead to rational decision-making. No one familiar with the problem of “choice overload” could believe that reflection on so many possible futures, and some impossible choices, would somehow capture people’s true preferences… (Read more and view comments at Forbes)
 

PeterUbel