Working Paper
                                  ISSN No. 2193-7214

                                      CEN Paper
                                     No. 04-2016

        Social Nudging with Condorcet Juries and its Strategic
        Implications for a Paternalistic Implementation of LED

                    Bettina Kalmbach*

          *Department of Economic Policy and Constitutional Economic Theory,
                   University of Freiburg, Germany.
               E-Mail: bettina.kalmbach@vwl.uni-freiburg.de

                     December 31, 2016

University of Freiburg
Institute for Economic Sciences
Department of Economic Policy and Constitutional Economic Theory
Platz der Alten Synagoge / KG II D-79085 Freiburg
                                              JEL-­‐Codes:  B13,  D03,  D60,  H10,  Q20  

           Social  Nudging  with  Condorcet  Juries  and  its    
    Strategic  Implications  for  a  Paternalistic  Implementation  of  LED  bulbs    
                               Bettina  Kalmbach    

     In  the  light  of  irrational  behaviour  and  decision  biases  leading  people  to  commit  
     systematic   blunders,   Thaler   and   Sunstein   (2003)   presented   in   their   approach   of  
     libertarian  paternalism  the  concept  of  choice  architecture,  to  face  the  problem  of  
     wrong   decision-­‐making   and   resulting   welfare   losses   by   “Nudging”   irrational  
     agents.   The   debate   about   this   approach   focuses   on   its   compatibility   with  
     libertarian   principles,   on   its   welfare-­‐enhancing   character   and   on   the   knowledge  
     problem   about   peoples´   true   preferences.   The   goal   of   this   paper   is   to   show   in   part  
     I   that   with   recourse   to   contract   theory,   applied   constitutional   economics   provides  
     a  justification  of  both  the  libertarian  character  and  the  profitability  of  libertarian  
     paternalism.   The   use   of   libertarian   paternalistic   policies   for   environmental   in  
     particular   to   promote   the   acceptance   and   purchase   of   climate-­‐friendly   and  
     sustainable   LED   bulbs   can   be   justified   as   a   self-­‐binding   commitment   induced   by  
     hierarchical   preferences   for   sustainability.   Referring   to   the   Condorcet   Jury  
     Theorem,   stating   that   1)   an   expert   jury   is   always   more   competent   than   a   single  
     expert  and  that  2)  for  large  juries,  group  competence  tends  to  infallibility  with  an  
     increase   in   group   size,   libertarian   paternalism   for   ecological   goals   can   be  
     defended   against   the   knowledge   problem.   In   part   II   an   extension   of   the   Condorcet  
     Jury  Theorem  relaxing  its  restrictive  assumptions  of  binary  choice,  homogeneous  
     and   independent   voters,   investigates   its   applicability   and   reliability   for  
     paternalistic   interventions   and   allows   a   new   perspective   in   the   debate   of   choice  
     framing   paternalism,   namely   the   concept   of   “social   nudging”   to   promote   social  
     long-­‐term   goals.   This   paper   provides   an   approach   of   effective   choice   framing   by  
     applying  the  CJT  and  implementing  expert  juries  with  the  subsidiary  principle.  It  
     investigates  with  regard  to  the  support  of  sustainable  “light-­‐consumption”  how  far  
     institutions  should  go  in  shaping  choice  situations  of  consumers  to  promote  their  


Inpiduals   often   fail   to   make   rational   decisions   that   are   consistent   with   their  
long-­‐term  preferences.  They  commit  systematic  blunders  either  due  to  natural  or  
to   cognitive   constraints.   Cass   Sunstein   and   Richard   Thaler   develop   in   their  
approach  of  libertarian  paternalism,  a  soft  form  of  paternalism  without  coercion,  
which   is   possible   due   to   the   sensitivity   of   preferences   to   the   choice   frame.   A  
purposefully  designed  choice  framing,  a  so-­‐called  “nudge”  shall  steer  choices  of  
irrational  agents  in  a  predicted  and  desirable  direction  to  improve  the  chooser’s  
inpidual   welfare.   Critics   raise   doubts   about   the   libertarian   and   welfare-­‐
enhancing   character   of   this   approach.   They   emphasize   the   likewise   bounded  
rationality   of   a   choice   architect,   who   is   in   charge   of   soft   paternalistic   policy  
making,   and   who   has   the   incentives   to   abuse   the   knowledge   about   cognitive  
misgivings   of   inpiduals.   Like   any   other   form   of   paternalism,   soft   paternalistic  
policies   are   as   well   subject   to   the   Hayekian   knowledge  problem,   stating   that   no  
policy   maker   can   know   better   what   is   in   the   best   interests   of   an   affected  
inpidual,   than   the   inpidual   itself.   Another   main   topic   to   criticize   this  
approach  is  the  vague  and  broad  definition  of  situations  and  decision  contexts  in  
which  libertarian  paternalistic  policies  should  be  implemented,  and  who  should  
be   in   the   position   to   frame   decision   contexts.   Libertarian   paternalists   use   the  
inpidual´s   own   subjective   “well   being”   as   the   basis   for   regulatory   policies  
however   critics   mention   conceptual   misgivings   about   an   underlying   notion   of  
welfare  to  guide  the  paternalistic  planner.  
Part  I  illustrates  that,  pointing  out  the  character  of  consensus  of  soft  paternalism  
and   voluntary   inpidual   delegation   of   decision   competences   on   constitutional  
level,  in  order  to  minimize  decision  costs  and  errors  on  post  constitutional  stage,  
applied   constitutional   economics   serves   as   justification   for   both,   the   profitability  
and   the   libertarian   character   of   soft   paternalism.   Findings   from   behavioural  
economics   may   then   offer   promising   possibilities   for   (approvable)  
environmental  policies  such  as  the  implementation  of  higher  market  acceptance  
of  sustainable  LEDs.  Referring  to  the  work  of  Marquis  de  Condorcet  who  argues  
for   a   calculus   that   provides   a   proper   guarantee   for   majority   decision   of   a  

parliament  or  an  assembly  being  correct,  the  Condorcet  Jury  Theorem  (CJT)  can  
defend   approvable   soft   paternalistic   interventions   against   the   knowledge  
problem.  Furthermore  it  offers  a  hint  who  should  be  in  the  position  of  a  choice  
architect.   Given   there   exists   for   an   inpidual   with   incomplete   information   a  
welfare   maximizing   option   in   a   choice   set,   the   theorem   states   that   a   jury   of  
experts   under   certain   conditions   with   a   simple   majority   voting   is   more  
competent  to  find  the  welfare  maximizing  option  than  the  respective  inpidual  
itself.   When   soft   paternalistic   choice   framing   is   given   over   from   one   planer   to  
expert  juries  (on  post-­‐constitutional  level),  choices  made  by  those  expert  juries  
are  more  likely  to  be  correct  than  inpidual  choices  and  may  even  converge  to  
infallibility,   while   decision   costs   remain   at   a   moderate   level.   Considering   the  
approach   of   Sunstein   and   Thaler   the   CJT   can   provide   a   normative   justification   of  
soft  paternalism  regarding  the  knowledge  problem.    
In   part   II   an   investigation   of   the   conditions,   under   which   the   CJT   holds,  
furthermore  allows  a  more  precise  definition  of  the  underlying  notion  of  welfare  
as   basis   for   regulatory   policies.   This   paper   contends   that   in   the   course   of   an  
extension   of   the   CJT   by   relaxing   its   assumptions   of   homogeneity   and  
independence   among   jury   members   as   well   as   the   binary   choice   the   CJT   can  
provide   efficient   inquiry   in   true   preferences,   if   social   values   and   common  
interests   are   determining   these   (long-­‐term)   preferences   of   voters.   In   these   cases  
expert  juries  are  able  to  identify  and  promote  true  social  preferences  and  make  
“better   choices”   than   inpiduals.   Assuming   the   existence   of   common   interests,  
and   juries   implemented   according   to   the   subsidiary   principle,   the   CJT   can   be  
adopted  as  a  normative  guideline  to  capture  precisely  citizens´  signals  about  true  
preferences,   to   consider   welfare   effects   and   to   make   correct   decisions   about  
nudging  policies.      
This   classical   interpretation   of   the   CJT   as   a   mean   to   find   a   common   moral   or  
social   good   goes   in   line   with   the   contract   theoretical   approach   of   the   “General  
Will”   by   Jean   Jacques   Rousseau’s   and   justifies   its   application   from   the  
constitutional   economics   perspective   as   a   mean   to   develop   social   preferences.  
The  application  of  the  CJT  then  offers  possibilities  to  find  appropriate  means  to  
achieve   social   welfare   in   promoting   “right”   consumption   decisions.   While  

Sunstein   and   Thaler   use   the   inpidual´s   own   well   being   as   the   basis   for  
regulatory   policies   and   focus   on   consumer   protection,   health   and   retirement  
provisions,   this   article   focuses   on   social   welfare   generated   by   voluntary   self-­‐
binding   to   sustainable   consumption.   Directing   to   the   market   acceptance   of  
sustainable  LED  Bulbs  it  investigates  how  far  nudging  policies  to  promote  values  
for   sustainability,   may   improve   social   welfare   and   lead   to   a   higher   market  
acceptance  of  LEDs  as  well  as  a  paradigm  shift  in  consumer  behaviour,  while  still  
respecting   consumer’s   sovereignty.   Furthermore   it   derives   implications   for   a  
policy  strategy  to  implement  soft  paternalistic  institutions  to  increase  the  market  
acceptance  of  sustainable  LEDs.  

    1. Libertarian  Paternalism  –  its  Potential  and  its  Critics  
Recent   findings   of   behavioural   economics   have   raised   doubts   about   the  
rationality  of  peoples´  judgements  and  decisions.  Either  due  to  uncertainty  about  
the   future   loss   or   risk   aversion   and   overconfidence   in   their   own   forecasting  
abilities,  people  exhibit  irrational  expectations  and  fail  to  make  forecasts  that  are  
consistent   with   Bayes´   rule.   Instead   they   use   heuristics   that   lead   to   systematic  
decision   biases   such   as   endowment   effects   status   quo   orientation   inertia  
anchoring   and   framing   effects.   In   Addition,   cognitive   shortcomings   result   in  
wrong   or   slow   information   processing   and   errors.   This   lack   of   cognitive   ability  
can  mainly  be  put  down  to  the  existence  of  two  different  modes  of  thinking  and  
deciding.  Automatic  operations  of  perception  of  the  intuitive  cognitive  system  1  
predominate   the   deliberate   operations   of   reasoning   of   the   rational   system   2   in  
the   information   processing   and   decision-­‐making.   Most   choices   are   made   fast,  
effortless   and   intuitive   within   the   System   1   while   System   2   is   only   at   work   for  
explicit  judgements  under  an  effortful  deliberation  process.  Intuition  often  fails  
to   be   rational,   so   people   exhibit   preference   reversals   and   inconsistencies.   They  
make  different  decisions  depending  on  the  design  of  the  decision  problem.  Short-­‐
term   preferences   are   unstable   context   dependent   and   in   the   case   of  
intertemporal  choice  inconsistent  with  long-­‐term  goals  (Thaler & Sunstein, 2003).  

People   value   present   consumption   much   more   than   future   consumption,  
overrate  own  decision-­‐making  capacities  and  underestimate  severe  risks  such  as  
future   fees   for   the   present   consumption   or   negative   health   effects.   These  
systematic   blunders   and   self-­‐control   problems   evoke   severe   economical   and  
psychological  welfare  losses (Kahneman, 2014).    
Thaler   and   Sunstein   considered   in   their   approach   of   libertarian   paternalism  
(also  headlined  as  asymmetric   or   soft   paternalism)  these  findings  of  behavioural  
economics.   They   introduced   the   concept   of   choice   architecture   to   face   the  
problem   of   incoherent   preferences   and   systematic   decision   biases.   In   the   case   of  
bounded   rational   inpiduals,   a   carefully   designed   choice   framing   should  
influence  peoples´  choices  in  a  predictable  and  desired  direction  to  enhance  their  
well-­‐being.   They   defend   their   agenda   as   a   weak   and   nonintrusive   type   of  
paternalism  helping  irrational  people  to  overcome  cognitive  shortcomings,  while  
imposing  no,  or  just  minimal  costs  on  those,  who  decide  fully  rational (Thaler &
Sunstein, 2012).   The   authors   claim,   that   this   kind   of   interference   in   inpidual  
decision-­‐making   respects   “freedom   of   choice”   and   is   acceptable   even   for   to  
committed   libertarians.   Choices   are   neither   blocked   nor   fenced   off.   The   planer  
respects  personal  autonomy  and  does  not  prescribe  or  proscribe  any  particular  
option,  after  all  people  can  easily  opt  out  of  the  recommended  choices  (Thaler &
Sunstein, 2003).   Thaler   and   Sunstein   contend,   that   this   minimal   kind   of  
paternalism   is   inevitable   and   public   or   private   institutions   that   control   choice  
frames   will   compulsory   shape   peoples´   preferences   and   choices   because   in   the  
case  of  ill-­‐formed  or  unclear  preferences  that  vary  with  the  design  of  the  decision  
context,  choices  are  inevitably  influenced  by  default  rules,  starting  points  or  the  
framing  of  the  decision  problem.  Libertarian  paternalistic  policies  should  then  be  
designed   in   the   way,   that   the   framing   of   the   decision   context   imposed   on   an  
inpidual   improves   with   soft   incentives   the   chooser’s   own   welfare   (Thaler &
Sunstein, 2003).  
Critics   against   this   the   libertarian   paternalism   as   a   form   of   public   decision-­‐
making   are   mainly   based   on   the   idea   of   normative   inpidualism   considering  
only  the  inpidual  itself  to  being  in  the  position  to  decide  in  its  best  interest,  and  
only   if   it   is   free   to   choose,   otherwise   any   kind   of   state   intervention   provokes  

redistributive   effects   and   welfare   losses.   Glaeser   (2006)   expects   public   decision-­‐
making   even   to   increases   cognitive   biases   and   systematic   decision   errors.   He  
argues,   that   soft   paternalistic   policy   makers   are   subject   to   the   very   same  
cognitive   shortcomings   and   decision   biases.   Beside   the   sensitivity   of   the   choice  
architect´s   decisions   to   outside   influences,   he   states   that   decision   biases   and  
collective  errors  carried  out  through  voting  i.e.  by  an  “irrational  median  voter”,  
will   even   increase   just   in   a   more   complex   manner   and   on   higher   institutional  
level.     Furthermore   he   expects   error   correction   on   private   level   to   be   more  
successful,  as  private  incentives  to  reduce  errors  are  stronger  and  private  costs  
of   learning   are   lower.   Thus   public   decision-­‐making   does   not   prevent   to   make  
systematic   errors,   and,   due   to   bounded   rational   policy-­‐makers   and   a   lack   of  
transparency,   libertarian   paternalistic   policies   are   more   difficult   to   control   and  
easy   to   abuse   (Glaeser, 2006)   (Rebonato, 2012).   Following   these   Arguments  
opponents   of   libertarian   paternalistic   policies   emphasize   beside   the   lack   of  
transparency,   as   well   as   a   missing   narrow   definition   of   the   situations   when  
nudges   should   be   implemented (Mitchell, 2005) (Grüne-Yanoff, 2012).   Above   all  
the   Hayekian   knowledge   problem   faces   Libertarian   Paternalism   as   well   as   any  
other   harder   form   of   state   intervention.   Rizzo   and   Whitman   (2009)   argue   that  
policy-­‐makers   do   not   have   the   access   to   the   knowledge   needed   to   implement  
welfare   improving   policies.   Thus   no   policy-­‐making   agent   is   capable   of   knowing  
better,  what  would  be  in  the  inpidual’s  best  interest  than  the  inpidual  itself.  
Committed   Libertarians   expect   rather   the   inpidual   to   know   about   their  
preferences   far   better   than   any   third   party   does (Rizzo & Whitman, 2009).  
Furthermore,   proponents   of   libertarian   paternalism   express   scepticism   about  
the   notion   of   preferences   used   in   welfare   economics,   referring   to   irrational  
choices   made   by   inpiduals,   but   their   “true”   preferences   to   consider   welfare  
effects   do   not   formally   exist.   Grüne-­‐Yanoff   (2012)   expects   an   inquiry   in  
inpidual  preferences  to  derive  social  values  and  a  socially  desirable  behaviour  
to   fail,   due   to   this   lack   of   information   (Grüne-Yanoff, 2012).   The   weak   spot   of   the  
concept   of   libertarian   paternalism   pointed   out,   is   that   it   does   not   endorse   any  
particular   measure   of   welfare   that   can   guide   a   planner   to   track   anticipated  
choices  to  enhance  welfare.  In  so  far,  Thaler  and  Sunstein  avoid  the  issue  of  what  
exactly   welfare-­‐enhancement   should   look   like,   which   constitutes   the   most  

difficult   and   important   question   raised   by   welfare   focused   paternalism (Mitchell,
2005).  There  is  no  normative  criterion  for  libertarian  paternalistic  policies  when  
it  comes  to  the  a  goal  that  a  planner  should  try  to  achieve  as  well  as  the  definition  
who   should   be   the   “over-­‐all-­‐rational   planer”   who   would   be   in   the   position   to  
“nudge”  inpiduals.    

    2. Constitutional  Economics  as  Justification  –  Libertarian  Paternalism  as  
      Collective  Self-­‐Binding  of  Reflective  Preferences  
Most   critics   against   libertarian   paternalism   refer   to   the   classical   principle   of  
normative   inpidualism.   A   justification   of   soft   paternalism   is   hardly   to   find  
sticking   to   this   economic   model   as   it   uses   a   utility   function   with   many  
dimensions   but   only   one   level.   Inpidual   decisions-­‐making   however   shows  
evidence   for   phenomena   like   weakness   of   will   and   time   inconsistencies.   In   these  
points  the  traditional  economic  approach  fails  (Kirchgässner, 2014).  A  rejection  of  
soft   paternalistic   interference   referring   to   the   absence   of   allocative   biases   and  
market   failure   neglects   cognitive   biases   of   revealed   preferences.   In   the  
argumentation  of  libertarian  paternalists  welfare  judgements  based  on  a  biased  
normative   criterion   of   revealed   preferences   are   expected   to   exhibit   the   same  
errors.   Referring   to   the   two-­‐system-­‐model   of   cognition   used   in   behavioural  
economics,   proponents   of   libertarian   paternalism   argue   that   “[...]   the   fact   that  
human   persons   reflecting   on   themselves   usually   take   on   the   long-­‐run  
perspective   rather   provides   evidence   for   the   long-­‐run   preferences,   as   does   the  
fact   that   inpiduals   often   heavily   underestimate   the   costs   of   the   actions   that   are  
guided   by   their   short-­‐run   preferences.”   (Kirchgässner, 2014).   Thus   they   assume  
inpiduals   that   are   able   to   determine   long-­‐term   preferences,   which   are   rated  
over   short-­‐term   desires,   and   to   judge   about   the   consistency   of   short-­‐term   and  
long-­‐term  preferences.  
“Otherwise   it   is   difficult   to   understand   why   people   regret   their   own   earlier  
behaviour  when  foreseeable  consequences  become  obvious  that  were  not  taken  
into   account   before.”   (Kirchgässner,   2014).   This   model   of   hierarchical  
preferences  explains  how  people  bind  themselves  to  overcome  weakness  of  will  
or   cognitive   shortcomings   in   order   to   achieve   long-­‐term   goals (Kirchgässner,

2014)   and   goes   in   line   with   the   behavioural   economics   model   of   two   cognitive  
systems.   Referring   to   huge   evidence   for   private   self-­‐binding,   libertarian  
paternalists   base   their   welfare   judgements   and   policy   implications   rather   on  
these   long-­‐term   “meta”   preferences,   which   they   consider   to   be   a   “less-­‐biased”  
and   more   reliable   criterion,   (Thaler & Sunstein, 2003).   If   self-­‐binding   is  
established  not  only  on  inpidual  but  on  collective  level,  soft  paternalistic  policy  
interventions   can   be   understood   as   a   type   of   collective   self-­‐commitment   to  
higher   ordered   preferences   introduced   through   the   political   process.   These  
reflective   preferences   have   higher   relevance   and   are   easier   to   follow   in   the  
political   process.   Inpiduals   are   unaware   about   the   costs   for   violating   their  
short-­‐term  preferences  during  the  voting  process  while  they  suffer  the  costs  of  
refraining   short-­‐term   desires   immediately   on   markets.   However   taking   a   long-­‐
run  perspective  they  can  reflect  about  the  cost  of  violating  long-­‐term  preferences,  
that  become  relevant  in  the  future.  (Kirchgässner, 2014).  The  relevance  of  higher  
ordered   preferences   in   the   political   process   is   observable   when   for   examples  
third  persons´  interests  as  well  as  moral  or  ecological  values  are  more  respected.  
The   Model   of   hierarchical   preferences   then   provides   a   justification   for  
paternalistic   policies   and   fits   with   the   normative   inpidualism.   Following   this  
argumentation   does   no   longer   allow   the   use   of   normative   inpidualism   as   a  
principle   objection   against   merit   goods   or   paternalistic   policies   (Kirchgässner,
Furthermore   hierarchical   preferences   defend   the   approach   of   libertarian  
paternalism   against   critics   about   its   welfare-­‐economical   underpinning   because  
they  can  become  integrated  into  welfare  economics.  Kirchgässner  (2012)  points  
out  that  in  this  sense  critics  about  the  redistributive  effects  appear  exaggerated  
(Kirchgässner, 2012).  
Collective   self-­‐engagement   induced   by   hierarchical   preferences   corresponds   to  
the   analogue   model   of   John   Rawls´   contract   theory   “Justice   as   Fairness”   where  
people   decide   in   a   natural   state   of   original   equality   and   behind   the   veil   of  
ignorance   in   their   own   interest   but   without   interests   against   each   other,   about  
the   principles   to   determine   fundamental   arrangement   of   social   and   political  
cooperation.  In  this  natural  state  inpiduals  do  not  know  how  they  end  up  in  the  

later   political   process   neither   how   decided   rules   will   directly   affect   them.   Due   to  
this   lack   of   information   about   the   future   inpidual   situation   long-­‐term  
preferences   are   likely   to   dominate (Kirchgässner, Sanfter Paternalismus,
meritorische Güter und der normative Inpidualismus, 2012).    
Rawls   contends   that   if   inpiduals   reason   in   the   natural   state   about   a  
constitutional   design,   the   veil   of   ignorance   is   the   best   model   to   track   the   reasons  
of  the  people  and  decided  institutional  settings  reflect  their  rational  preferences
(Rawls, 1971).    
The   profitability   and   efficiency-­‐enhancing   character   of   libertarian   paternalism  
can  then  be  justified  from  the  perspective  of  contract  theory,  by  pointing  out  its  
character   of   consensus   and   referring   to   Buchanan´s   applied   constitutional  
economics (Vanberg, Albert, & Goldschmidt, 2009).   Government   undertakes   the  
task   of   preserving   the   existing   legal   system   on   constitutional   level,   as   a  
regulatory   framework   of   legal   allocations   like   entitlement-­‐granting   rules   or  
procedural   norms   against   which   contracts   are   made   (Sunstein & Thaler, 2003).  
Government’s   function   on   the   post-­‐constitutional   level   however,   is   to   design  
institutional   frameworks   that   enforce   the   mutual   advantages   of   decided   legal  
setting.   This   efficiency-­‐analysis   of   economic   policy   refers   to   the   long-­‐term  
process   of   the   realization   of   gains   from   trade.   In   Buchanan´s   applied  
constitutional  economics,  the  voluntary  approval  of  contract  parties  as  normative  
criterion   for   the   realization   of   long-­‐term   gains   is   transmitted   to   the   post-­‐
constitutional   level   where   regulatory   changes   are   proposed   and   adopted.  
According  to  the  view  that  gains  from  trade  are  only  possible  if  legal  frameworks  
enable   and   support   their   realization   voluntary   approval   serves   also   in  
constitutional  economics  as  criterion,  to  indicate  how  far  collective  acting  in  the  
political   process   can   realize   and   support   the   achievement   of   long-­‐term   goals   and  
create   collective   advantages.   Thus   voluntary   approval   of   affected   citizen   to   rules  
and  regulations  serves  as  criterion  to  judge  about  the  efficiency  and  desirability  
of  institutional  rules  and  regulations.  To  what  extent  they  represent  the  interests  
of   affected   citizen   and   support   their   realization,   relies   basically   on   their  
prevailing   potential   of   consensus (Neumann, 2013, p. 136).   “Such   constitutional  
choice  of  constraints  is  a  most  important  means  for  inpiduals,  separately  and  
jointly,  to  achieve  their  self-­‐chosen  goals  (Vanberg V. J., 2014, S. 341).    

Applied   constitutional   economics   identify   and   propose   institutional   designs  
being  potentially  approvable  by  affected  citizens,  in  a  consulting  manner.  Those  
will   be   informed   e.g.   by   a   hypothetical   imperative   which   arrangements   would   be  
helpful  to  achieve  certain  goals.  The  decision  about  these  goals  however  remains  
up   to   the   citizens   and   respects   electoral   inpidualism.   In   the   process   of  
voluntary   approval   citizens   decide   according   to   their   inpidual   values   that   are  
not  necessarily  goal-­‐oriented (Neumann, 2013, p. 134).  Thus  it  can  also  include  a  
social  or  a  moral  value,  which  exceeds  the  model  of  the  homo  oeconomicus,  used  
in   classical   welfare   economics,   but   respects   the   normative   inpidualism.  
Libertarian   paternalistic   choice   architecture   as   constraints   on   consumers´  
choices   is   both,   liberal   and   efficiency   enhancing   if   its   design   draws   from   a  
voluntary   constitutional   choice   of   affected   inpiduals   and   respects   the  
inpidual  as  ultimate  sovereigns  (Buchanan, 1991, S. 227).  Inpiduals  remain  as  
principles  and  decide  about  the  desirability  of  paternalistic  interference  as  well  
about  how  and  which  interference  relate  to  their  inpidual  long-­‐term  goals.  In  
accordance   of   the   Rawlsian   idea   of   an   overlapping   consensus,   in   Buchanan´s  
applied   constitutional   economics,   constraints   that   find   the   approval   in   the  
political  process  and  are  carried  out  on  the  post-­‐constitutional  level,  reflect  those  
self-­‐binding   Nudges,   which   maintain   liberal   principles   and   generate   mutual  
advantages.   Thus   libertarian   Paternalism,   if   voluntary   approvable,   relying   of  
Rawls´   and   Buchanan´s   constitutional   theory   can   be   both   liberal   and   efficiency  

    3. The  Condorcetian  Safeguard  for  Libertarian  Paternalism  
Critics  concerning  the  profitability  and  libertarian  character  of  soft  paternalistic  
policies   can   be   weakened   referring   to   the   contract   theoretical   model.   Although  
Sunstein   and   Thaler   create   with   the   reference   to   consumers´   sovereignty   this  
important  link  to  the  contract  theoretical  work  of  John  Rawls,  their  justification  
of   libertarian   paternalism   is   more   related   to   the   lack   of   rationality,   that   let  
people  fail  to  maximize  their  utility  according  to  their  long-­‐term  preferences.  As  
libertarian  paternalists  raise  doubts  about  the  normative  criterion  of  preferences  

revealed  by  choice  it  is  important  to  point  out  that  the  analogy  to  the  situation  of  
collective   self-­‐binding   only   holds   as   long   as   one   assumes   the   predominance   of  
reflective   preferences   on   constitutional   level   (Kirchgässner, Soft Paternalism,
Merit Goods, and Normative Inpidualism, 2014).   Even   if   this   assumption   holds  
democratic   decision   making   over   paternalistic   interventions   stays   with   the  
problem   that   a   majority   decides   over   means   that   usually   do   not   find   the   consent  
among   a   minor   part   of   the   population,   that   nevertheless   has   to   bear   the   costs.   In  
the   contract   theoretical   approach   it   should   be   decided   behind   a   veil   of   ignorance  
in  which  areas  decisions  about  paternalistic  means  should  be  made  and  how  far  
they   should   go.   Which   rules   then   exactly   would   be   decided   is   a   matter   of  
speculation,  and  even  if  done  so  in  the  constitutional  economics  approaches,  in  
most   cases   such   hypothetical   situation   is   hardly   to   establish   and   at   best   partially  
(Kirchgässner, 2014).   Regarding   actual   constitutional   choices   Buchanan  
acknowledges   the   little   normative   and   explanatory   significance   of   some  
hypothetical   agreement   under   the   ideal   conditions   of   the   Rawlsian   veil   by  
establishing   a   veil  of  uncertainty,  whose   “thickness”   may   vary   (Buchanan, 1991, S.
56).  However,  the  more  transparent  the  veil,  the  weaker  gets  the  argument  of  a  
reflective   and   rational   inpidual   choice   in   the   political   process,   as   “The  
restrictions   on   particular   information   in   the   original   position   are   (…)   of  
fundamental   importance.”   (Rawls, 1971, S. 140).   People   who   can   accurately  
anticipate   in   which   ways   decided   rules   would   directly   affect   them   may   tend   to  
agree   on   rules,   following   biased   preferences   and   we   are   not   sure   whether  
approvable  means  reflect  “true”  and  non-­‐biased  preferences.  Thus  it  is  possible  
that     “true”   preferences   are   neither   revealed   nor   expressed   by   affected  
inpiduals.  “Evidence  suggests  that  agents  may  not  have  “true”  preferences  at  all.  
This,   in   itself,   presents   a   problem   for   the   new   paternalist   paradigm;   we   cannot  
claim  to  make  people  better  according  to  their  preferences  if  such  preferences  do  
not  exist”  (Rizzo & Whitman, 2009, p. 922).  Libertarian  paternalists  assuming  that  
true   preferences   exist,   are   still   faced   with   the   Hayekian   knowledge   problem  
about   inpidual´s   true   preferences:   “Does   the   paternalist   know   the   true  
preferences   better   than   the   agent   himself?” (Rizzo & Whitman, 2009, p. 922).   The  
approach   of   libertarian   paternalism   does   not   yet   offer   an   approach   for   the  
inquiry  in  inpidual  preferences  to  identify  the  shape  of  long-­‐term  preferences.  

Thus   it   does   not   provide   a   clear   commitment   to   a   welfare   criterion,   guiding   a  
paternalistic   policy-­‐maker   in   choosing   the   “right”   option   in   a   choice   frame.  
Thaler   and   Sunstein   mention   methods   to   seek   indirect   proxies   for   a   welfare  
criterion,   based   on   the   outcome   of   majority   choices.   That   goes   in   line   with   the  
contract   theoretical   model   of   an   overlapping   consensus   to   choose   the  
right/rational   option.   However   Rawls   assumes   inpiduals   to   choose   a   rational  
plan   of   life   under   hypothetical   conditions   of   “deliberative   rationality”,   where  
they   have   full   knowledge   about   ones   circumstances,   capacities   and   interests  
(Freeman, 2016).  The  argumentation  of  libertarian  paternalism  however,  sticks  to  
behavioural   findings   and   stresses   on   exactly   the   bounded   rationality   under  
which   inpiduals   do   their   choices   (under   uncertainty).   Although   they   assume  
inpiduals   to   commit   systematic   blunders,   Sunstein   and   Thaler   are   confident  
that   a   planner   would   choose   the   rational   alternative,   if   this   option   would   be  
either   hypothetically   or   factually   –   “as   required   active   choice”   -­‐   approvable   by  
majority (Sunstein & Thaler, 2003).   Even   if   they   offer   proxies   for   approaches   to  
identify   correct   options   in   a   choice   set,   they   do   not   give   a   normative   criterion  
how   to   identify   long-­‐term   preferences   as   a   “rational   plan   of   live”   neither   do   they  
justify  why  they  expect  majority  decisions  to  be  right.  
Libertarian   paternalists   assume   that   choices   made   by   a   majority   converge   to   a  
rational   decision   independent   of   inpidual   starting   points,   and   thus   that   they  
are  with  a  higher  probability  correct,  than  inpidual  choices.  Furthermore  they  
assume,  that  often  outstanding  organisations  do  a  better  job  in  decision  making  
as   the   inpidual   itself,   because   organisations   have   the   power   to   induce  
organized   proceedings   what   makes   them   more   efficient   in   aggregating   and  
processing  information  (Kahneman, 2014; Vanberg V. J., 2014).  
This  reference  to  majority  outcomes  encourages  considering  the  Condorcet  Jury  
Theorem   (CJT),   as   theoretical   underpinning   for   information   aggregation   in   the  
inquiry   in   inpidual   preferences.   The   Condorcet   Jury   Theorem   states,   that   any  
jury   of   odd   numbers   of   jurors   is   more   likely   to   select   the   correct   option   between  
two   alternatives   than   any   single   juror,   if   voter   have   homogenous   decision  
competences  of  more  than  one  half  and  vote  independently.  This  holds  even  if  a  
single  outstanding  expert  has  more  private  information.  The  probability  of  being  

correct  increases  in  the  number  of  jury  members  and  converges  to  a  probability  
of   1   in   the   end.   If   decision-­‐making   will   be   given   over   to   a   Condorcet   jury,   the  
theorem   provides   implications   to   face   the   knowledge   problem   of   paternalistic  
policy  measures  i.e.  to  derive  the  correct  option  of  a  choice  setting.    
Furthermore  relying  on  the  CJT  one  can  answer  the  question  about  who  should  
be   in   the   position   to   design   choice   frames.   Proofing   majority   voting   as   an  
efficient   mean   for   aggregating   decentralized   information   in   the   quest   for  
inpidual   welfare   the   theorem   provides   with   an   expert-­‐jury,   a   so   called  
Condorcet  Jury  a  wise  paternalistic  planner.    

    4. Implications  for  paternalistic  climate-­‐change-­‐policies.  
Applying   the   approach   of   soft-­‐paternalism   and   its   constitutional   economics  
justification   to   the   problem   of   global   warming   and   a   resulting   desired   goal   to  
increase   the   market   share   of   climate   friendly   LED   bulbs,   one   can   assume,   that  
inpiduals   are   aware   about   environmental   problems   and   would   agree   on   the  
overrated   long-­‐term   goal   to   reduce   climate   warming   as   well   as   on   the  
(voluntary)   self-­‐binding   to   achieve   the   ecological   long-­‐term   goal   by   supporting  
the  purchase  of  climate-­‐friendly  products.  As  inpidual  decisions  involve  costs,  
inpiduals   typically   routinize   their   day-­‐to-­‐day   choices.   They   adopt   a   rule   that  
dictates  their  behaviour  for  many  single  choices  to  reduce  the  costs  of  inpidual  
decision-­‐making   and   will   only   invest   in   decision-­‐making,   since   the   marginal  
benefits  exceeds  the  marginal  costs  (Buchanan & Tullock, 1999).  Decision-­‐making  
as  a  matter  of  routine  may  on  the  one  hand  minimize  decision  costs  but  on  the  
other,   involve   the   mentioned   heuristics   and   biasing   effects   mentioned   by  
behavioural  economists  that  prevent  inpiduals  to  decide  rational  according  to  
their  long-­‐term  goals.  
 Being   aware   about   their   bounded   rationality   and   lack   of   willpower   in   (short-­‐
term)   buying   decisions,   citizen   are   therefore   expected   to   agree   generally   on  
constitutional   level   on   nudging   policies   as   a   voluntary   self-­‐binding,   to   prevent  

the  risk  of  wrong  decision  making  as  well  as  to  minimize  costs  of  an  inpidual  
“rational”   decision.   They   delegate   part   of   their   decision   competences   to   an  
outstanding   authority   that   will   be   on   post-­‐constitutional   level   in   charge   to  
purposefully  design  choice  sets  so  that  inpiduals  can  follow  in  a  routinized  way  
the   recommended   option   of   the   respective   choice   set.   These   nudges   will   affect  
inpiduals   in   the   later   process   and   are   expected   to   help   them   to   behave  
according  to  their  self  chosen  long-­‐term  goal  of  sustainable  consumption  in  their  
day-­‐by-­‐day  buying  and  behaving  decisions  concerning  the  consumption  of  “light”  
In  accordance  to  Buchanan´s  calculus  of  consent  collective  choice  is  considered  
to  be  efficient,  if  people  motivated  by  a  “common  good”  decide  unanimously  on  
constitutional  level  to  delegate  parts  of  their  decision  competences  to  a  political  
institution  and  how  the  respective  institution  should  be  designed  and  regulated,  
whereas   on   the   post-­‐constitutional   level   collective   decision   making   will   be  
carried   out   by   majority   decisions.   In   order   to   minimize   inpidual   decision-­‐
making   costs   as   well   the   bargaining   costs   of   collective   choice,   on   post-­‐
constitutional  level,  the  outstanding  institution  is  empowered  to  help  inpiduals  
to   achieve   their   “common   good”,   which   is   in   our   case   the   ecological   long-­‐term  
goal   of   energy   efficiency.   The   institution   would   then   be   empowered   to  
implement  particular  nudging  policies  that  will  steer  inpidual  choices  towards  
LED   consumption   if   they   are   affected   by   decision   biases   or   lack   of   willpower.  
Nudges   can   be   expected   to   decrease   inpidual   decision   costs   by   implementing  
and   fostering   the   routine   for   sustainable   consumption   pattern   as   well   as   to  
decrease   the   search   and   information   costs   for   consumers   regarding   LED  
attributes   and   inpidual   needs   (i.e.   light   colours,   lumen)   via   information  
provision   and   information   architecture.   The   commitment   to   the   delegation   of  
these  decision  competences  as  well  as  the  formation  of  “nudge  units”  would  then  
be   subject   of   a   social   contract,   that   defines   pursued   long-­‐term   goals   and   the  
design  and  regulation  of  such  government  intervention.    
On   constitutional   level   people   decide   behind   a   veil   of   uncertainty   about   rules  
regulations   of   the   constitutional   setting   for   the   support   of   LEDs.   This   procedural  
approach   meets   the   requirement   for   a   fair   social   contract   to   respect   the  
inpiduals   as   ultimate   sovereigns.   On   post   constitutional   level   however   the  

decision  making  underlies  an  outcome  oriented  process,  namely  the  reliability  of  
majority  decisions  being  correct  within  a  nudge  unit  and  among  large  electorates.  
Constitutional  risks  and  uncertainties  that  arise  in  an  incomplete  contract  when  
the  state  of  nature  is  realized  must  be  inferred  on  the  post  constitutional  stage  
(Jamil, 2011) by   constraining   a   nudge   unit   and   maximizing   the   probability   of  
correct  decision  making  and  thus  effective  choice  framing.1  
Given  there  is  consent  among  potentially  affected  citizen  to  delegate  in  the  light  
of  ill-­‐formed  or  unstable  preferences  to  decision  competences  to  an  outstanding  
organisation   and   referring   to   the   Condorcet   Jury   Theorem   as   rational  
justification   of   soft   paternalistic   policies   (Dold, 2016) and   proof   for   majority  
decisions   being   more   likely   to   be   correct   than   inpidual   decisions,   decision-­‐
making   is   planned   to   be   given   over   to   an   outstanding   organisation   like   a  
Condorcet   jury.     Instead   of   one   paternalistic   planner,   a   Condorcet   jury   would  
decide  about  preferences  and  respective  nudges  relying  on  the  majority  outcome  
within   the   respective   jury   and   minimize   the   danger   of   the   knowledge   problem.  
Thus  the  formation  of  an  expert  jury  will  increase  the  possibility  of  correct  public  
decision  making  by  keeping  the  costs  of  collective  choice  moderate.  The  optimal  
size   of   a   Jury   to   minimize   interdependencies   of   bargaining   costs   and   correctness  
possibility   of   the   jury   depends   on   inpidual   competences   of   the   jury   members  
and  thus  on  the  degree  of  information  about  consumer’s  true  preferences.  Meta  
preferences  of  inpiduals  that  are  signalled  to  jury-­‐members  serve  as  a  welfare  
criterion   upon   which   a   jury   base   its   decisions   about   choice   architecture.   Jury  
members   can   observe   signalled   preferences   of   consumers   and   decide   whether  
these   are   reflective   preferences   that   will   serve   as   a   welfare   criterion   or   not.   If  
signalled  preferences  are  in  accordance  to  approvable  long-­‐term  goals,  a  jury  can  
base  its  decisions  about  choice  architectures  to  improve  consumers´  welfare  on  
these  meta-­‐preferences  and  decide  about  appropriate  policies.  

1  The  analytical  framework  of  a  social  contract  that  combines  a  procedural  

justification  of  paternalistic  policies  on  constitutional  level  with  an  outcome  
oriented  measure  on  the  post  constitutional  stage  will  be  elaborated  in  a  
separate  paper.    


    5. The  reliability  of  the  Condorcet  Jury  Theorem  
However   the   Condorcet   Jury   Theorem   itself   -­‐   assuming   homogenous   and  
independent   voters   with   inpidual   probability   of   correctness   of   >0.5   in   a   binary  
choice   underlies   restrictive   assumptions.   In   the   theoretical   framework   the   jury  
makes   its   decision   under   circumstances   that   are,   similar   to   the   veil   of   ignorance-­‐
model,   far   distant   from   realistic   assumptions.   The   concept   of   real   long-­‐term  
preferences  as  welfare  criterion  raises  the  question  about,  how  a  Condorcet  jury  
could   absorb   signals   for   advocated   decisions,   after   all   if   revealed   choices   are  
partly   biased.   A   generalization   of   the   Condorcet   Jury   Theorem   that   transmits   if  
from   its   pure   analytical   framework   to   more   realistic   circumstances   and   a   deeper  
examination   of   how   true   preferences   can   be   signalled   to   jurors   is   necessary   to  
proof  the  applicability  of  the  Condorcet  Jury  Theorem  and  offers  implications  for  
Jury   implementation   as   efficient   policy   strategy   for   welfare   inquiry   to   judge  
about   choice   architectures   of   consumers   and   to   design   an   appropriate  
implementation  strategy  of  LEDs.      

    6. The  Extension  of  the  Condorcet  Jury  Theorem    
Regarding  the  underlying  assumptions  of  the  Condorcet  Jury  Theorem,  one  can  
stand   that   in   its   pure   analytical   framework,   The   CJT   assumes   a   decision   under  
similar   hypothetic   circumstances   as   the   consent   in   the   contract   theoretical  
approach.   However   inpidual   skills   and   information   determining   inpidual  
correctness-­‐probabilities   are   not   homogenous,   such   as   shared   information   and  
unavoidable   rhetorical   or   personal   influence   inevitably   leads   to   correlation   of  
voters,  and  after  all  choices  are  seldom  binary.  The  applicability  of  the  CJT  as  a  
theoretical  underpinning  and  normative  criterion  for  welfare  inquiry  and  choice  
framing   is   given   only,   if   the   theorem   still   holds   after   relaxing   its   assumptions;   i.e.  
after   the   suspension   of   homogeneity   as   well   as   (statistical)   independency   of  
voters,  and  after  an  extension  to  a  choice  set  of  more  than  two  alternatives.  


Heterogeneous  Jury  Members  
The  assumption  of  homogeneity  can  be  given  up  by  an  extension  of  the  theorem  
to   heterogeneous   skills   and   information   among   jurors   if   at   average   the  
correctness-­‐probability   remains   at   leas   at   0.5.   If   the   outcome   of   the   vote   is  
known   as   well   as   the   rule   used   by   the   group   to   reach   its   decision   it   is   possible   to  
derive  proxies  for  inpidual  competences  that  serve  as  a  reference  for  choosing  
the   optimal   jury-­‐size   and   decision   rule   to   ensure   a   certain   level   of   group-­‐
competence.  Low  inpidual  competence  can  be  compensated  by  a  large  jury-­‐size,  
while   high   inpidual   correctness-­‐probabilities   enable   already   small   juries   to  
reach  a  correct  decision.  To  maximize  the  probability  of  a  correct  jury-­‐decision  in  
a   heterogeneous   group   inpidual   votes   can   be   weighted   such   as   the   decision  
rule  that  maximizes  the  group´s  probability  of  being  correct  is  given  by  assigning  
weights   to   the   jurors.   Analytically   based   on   a   logarithm   Grofman   et.   al.   (1983)  
derives  a  theorem,  where  the  weight  assignment  given  to  an  inpidual  depends  
exclusively  on  his  competence  independently  of  the  competence  of  other  group  
members.   High   inpidual   competence   enables   already   small   juries   with   high  
inpidual   weighting   of   votes   to   a   maximal   probability   to   decide   correct
(Grofman, Owen, & Feld, 1983).   Thus   the   heterogeneity   of   inpidual   skills   and  
correctness-­‐probabilities  supports  the  idea  of  implementing  small  expert  juries  
for  optimizing  decision-­‐making  

A  General  Dependant  Jury  
The   assumption   of   statistical   independency   requires   that   there   will   be   no  
opinion   leaders,   that   voters   do   neither   communicate,   nor   possess   common  
information   or   values,   concerning   culture,   religion,   beliefs   etc.   A   relaxation   if   the  
independency-­‐assumption   leads   to   mixed   results.   In   the   case   of   negative  
correlation,   nonmonotonic   decision   rule   may   lead   to   better   results   than   simple  
or   weighted   majority   voting.   Therefore   majority   voting   is   not   necessarily   the  
optimal   decision   rule   when   jurors   have   identical   competence (Berg, 1996).  
Marginal   changes   in   correlation   among   voters   may   have   only   little   effects   on   the  
collective   probability   for   a   correct   outcome.   However   assuming   positive  

correlation  the  effectiveness  of  majority  rule  voting  decreases  with  an  increasing  
degree   of   positive   correlation.   Negative   correlation   that   increases   group  
competence  can  mitigate  or  eliminate  those  harmful  effects  of  dependency  by  the  
statistical  mechanism  defined  by  CJT  but  in  binary  choices  the  correlation  if  it  is  
negative   will   be   small   and   decreasing   in   increasing   jury   size.   Replacing  
independent   variables   by   symmetric   dependant   variables   in   a   correlated  
binomial   distribution   Berg   (1996)   produces   the   result   that   jury   competence  
decreases   linearly   with   the   correlation.   A   moderate   degree   of   inpidual  
competence   and   a   high   degree   of   positive   correlation,   leads   to   a   group  
competence   that   may   even   fall   beyond   the   inpidual   competence   of   a   juror.  
Thus  the  marginal  utility  of  an  additive  jury  member  will  even  be  negative (Berg,
1996)  and  the  infallibility  in  the  limit  is  not  assured.    
However   assuming   heterogeneous   inpidual   competences   that   vary   across   a  
jury   according   to   a   beta   distribution,   Berg   (1996)   shows   that   the   first   part   of  
Condorcet   Jury   Theorem   extends   to   this   beta-­‐binomial   model   and   group  
competences  indeed  exceeds  inpidual  competence.  To  extend  the  second  part  
of   the   Condorcet   Jury   Theorem   to   the   beta-­‐binomial   case,   correlation   has   to  
vanish   quickly   in   increasing   jury   size.   The   Condorcet   Jury   Theorem   holds  
assuming   dependent   voters   if   Juries   are   rather   small   with   a   high   inpidual  
competence   and/or   there   is   only   moderate   degree   of   positive   correlation.   Berg  
(1996)   concludes   that   generalizations   of   the   Condorcet   Jury   Theorem   taking   it  
out   of   its   small-­‐group   decision-­‐making   context,   to   justify   majority   voting   as   an  
efficient   mean   of   aggregating   decentralized   information   by   collective   decision-­‐
making   represents   an   extension   to   environments   that   are   far   more   complex
(Berg, 1996).   However   in   small   expert-­‐juries   one   may   be   confident   reaching   with  
high  probability  a  correct  decision  even  if  there  are  interdependencies.      
Dependencies   among   voters   raise   thus   the   question   of   the   extent   to   which   the  
conclusions  of  the  Condorcet  Jury  Theorem  continue  to  hold.  Mc  Lennan  (1998)  
examines   the   Condorcet   Jury   Theorem   when   a   game   induced   by   the   voting  
procedure  is  played  rationally  with  the  result  that  the  profile  of  voting  strategies  
constitutes  a  Nash  equilibrium.  He  demonstrates  that  in  a  general  setting  there  

are  Nash  equilibria  that  have  the  same  properties  as  the  implications  of  sincere  
voting   described   by   the   Condorcet   Jury   Theorem.   By   assuming   that   all  
inpiduals   have   the   same   preferences   and   the   game   induced   by   voting  
procedure   is   a   game   of   common   interest   Mc   Lennan   proofs   „[...]   whenever  
sincere   voting   is   a   better   aggregator,   than   inpidual   dictatorship,   an   optimal  
strategy   profile   is   both,   at   least   as   good   and   an   equilibrium.   In   addition   as   the  
voters  increases,  optimal  strategy  profiles  yield  asymptotically  perfect  decisions  
[...]”   (McLennan, 1998, p. 414).  The  implications  of  the  Condorcet  Jury  Theorem  
still   hold   if   inpiduals   vote   strategically   according   to   a   symmetric   mixed  
strategy  equilibrium  of  the  game  induced  by  voting  procedure.  Peleg  and  Zamir  
provide   (2011)   provide   a   sequence   of   a   game   that   satisfies   the   Condorcet   Jury  
Theorem  and  give  the  necessary  conditions  for  its  validity (Peleg & Zamir, 2012).    
Concluding  that  even  by  assuming  heterogeneity  and  dependency  among  voters  
both   parts   of   the   Condorcet   Jury   Theorem   hold.   Especially   the   relaxation   of   its  
assumptions   allows   the   claim   that   already   a   small   expert   jury   with   high  
inpidual   competence   is   very   likely   to   choose   correct   between   two   alternatives.  
Pursuing   common   preferences   and   not   exclusively   inpidual   interests   against  
each  other,  a  majority  decision  of  a  large  assembly  decides  as  well  with  a  higher  
probability   correct,   than   an   inpidual.   This   probability   with   recourse   to   the  
game-­‐theoretical   findings   of   Mc   Lennan   (1998),   Peleg   and   Zamir   (2011)   will  
asymptotically   increase   with   an   increase   of   group   members.   Thus   the   Condorcet  
Jury  Theorem  serves  as  a  reliable  mean  to  aggregate  decentralized  information  
by  collective  decision-­‐making  even  in  large  assemblies.  
However dependencies may lead to strategic voting, especially in the case when one´s
vote is pivotal there are incentives to vote against private information but according to
group-dynamic aspects that involve contrary information. Dependencies and strategic
voting raise questions about the decision rule. As the Condorcet  Jury  Theorem  only
assumes naïve voters majority rule remains not necessarily as the optimal rule.

Empirical  Evidence  –  Challenging  Majority  Rule  
Important Juries often use the unanimous rule to optimize the decision outcome.
However this perspective is based on the assumption of non-strategic voting.

Incentives for strategic voting in an unanimous juries are fairly high as every single
vote is pivotal, which leads Feddersen and Pesendorfer (1998) to conclude that
unanimity is an inferior decision rule because of the higher probability of strategic
error. This probability of wrong inpidual decision however decreases with
increasing jury member when applying majority rule (Feddersen & Pesendorfer,
1998). Coughlan allows communication among jury members and shows that if it is
possible to have a straw poll before the final vote, there are informative and sincere
equilibria, where voters reveal their information in the straw poll and vote optimally
in the final vote (Coughlan, 2000). This type of voting eliminates the unattractive
aspects of unanimity rule, with regard to strategic voting, and decisions under
majority rule are expected to be identical to those in the non-strategic unanimity case
(Guarnaschelli, McKelvey, & Palfrey, 2000).

Guarnaschelli et. al. (2000) provide empirical evidence running an experimental study
to examine the variables of group size, decision rule and pre-vote deliberation. Voters
received signals about the true state of the world and decided based on this private
information. Votes based exclusively on private information showed evidence for
strategic voting and resulting errors, in a 6-person group to a higher extend than in the
3-person group. In the case of a straw poll, jury members revealed their information
and voted then optimally in the final vote. Shared information eliminated strategic
voting in the unanimity vote, while under majority rule voters adapted strategically
their vote to the outcome of the straw poll. Thus communication could mitigate the
incentives to vote strategically in the unanimity case and created incentives to reflect
about the private information under majority rule. In both cases errors were reduced
(Guarnaschelli, McKelvey, & Palfrey, 2000). This evidence supports the idea of
majority voting leading to correct decisions even under complete suspension of the
independency assumption. In the case of a simultaneous game, errors decrease in size
of the electorate and makes the theorem applicable even for large electorates (if voters
pursue a common goal), while in the case of small jury the aggregation of information
eliminates negative aspects of strategic voting under unanimity rule and creates
incentives to reflect about private signals, which leads to equal and high jury
competence independent of the decision rule.

The  Many-­‐Option-­‐Case  
The Extension of the Condorcet   Jury   Theorem   relaxing the assumptions of a
homogeneous and independent jury members allows its extrapolation from juries to
electorates, more generally. However the Condorcet   Jury   Theorem   assumes a binary
choice, which constitutes real limits on the theorem as most important decisions are
not necessarily going to boil down on two options and people are not generally more
than half-likely to choose the right option. An Extension of the Condorcet   Jury  
Theorem  to a plurality options case is possible with recourse to the Condorcetian pair
wise comparison. The vote between more than two alternatives is then carried out by
a pairwise decision between the alternatives, but the probability to choose the right
option between each of those pairs still remains by more than 0.5. List and Goodin
(2001) proof that the theorem still holds in the case of more than two alternatives
when the inpidual correctness-probability falls below 0,5 in the many-option case,
as long as inpidual probability to choose the right option is higher than the
probabilities to choose any other option, even if more slowly this likelihood that the
correct option will be the plurality winner increases in the size of the electorate (List
& Goodin, 2001). List and Goodin challenge the plurality rule from the perspective of
epistemic democracy, i.e. to examine whether plurality vote is a reliable truth tracker
in the sense that the outcome reflects the preferences of the electorate. They compare
plurality rule with other social decision rules, like the pairwise Condorcet, the Borda
count, the Hare system and Combs system. By doing this they manifest that already at
a size of 50 voters the outcome of a plurality vote is expected to be the epistemically
desirable outcome and more sophisticated decision rules perform only marginally
better (List & Goodin, 2001). Being a good truth-tracker from the epistemic
perspective and straightforward to carry out, plurality votes among citizens, as
electorates, will reliable reflect their preferences and serve as signals about true
preferences to jurors in expert juries.

Rousseau´s  General  will  -­‐  Consensus  beyond  a  “Natural  State”    
The CJT  as  a  mean  to  develop  a  true  common  preferences  supports the approach to
identify and pursue common interests by voting. Grofman and Feld (1988) interpret
the theorem, as analytical underpinning of Rousseau’s theory of the general will. An
understanding of the implications of the CJT   enables to clarify and promote

Rousseau’s confidence about the possibility to discern the general will by means of
voting in an Assembly of the People. The basic Idea of Rousseau’s notion of the
general will is based on three substantial assumptions: 1) There is a common good,
and 2) citizens do not always judge correctly about what this common good is, but 3)
when citizen strive to identify this common good and vote in accordance with their
perceptions of it, the vote in an Assembly of the People can be understood as most
reliable means to ascertain the common good. Rousseau distinguishes between the
“general will” and the “will of all” and describes the latter as a sum of particular
private self-interests. People differ in inpidual self-interests and care about the
protection and realization of these interests, but there exists a common social major
interest that is approvable even when people decide according to private interests.
People’s judgements about what is in the public interest determines then social values,
as a general will and inpidual self-interest will be cancelled out in the process of
aggregation. CJT   proves in an analytical manner that true social values and
preferences can be determined by majority voting (Grofman & Feld, 1988). There is
similar underlying basic idea of the contract theory of Rawls´ and the general will, but
contrary to Rawls, Rousseau does not expect people to vote behind a “veil of
ignorance” under ideal circumstances of in an abstract of a natural state but under
“reasonable” circumstances that fit more with the model of the “humans” used in the
libertarian paternalism. The general will therefore does not possess the absolute claim
of infallibility but it is always upright and tends towards the public utility. Although
deliberations of the people may have different rectitude, collective judgment is
reliable to declare the general will if assembly members vote under reasonable
conditions, i.e. informed, sincere, and without communication among themselves.
Rousseau’s notion of the general will provides a link to a regulatory concept, which
considers entirely real circumstances. It provides beside the analytical, empirical and
epistemical proofs of the implications of the Condorcet   Jury   Theorem,   a justification
to identify common values by majority voting from a social-democratic perspective.

    7. The   Condorcet   Jury   Theorem   in   Practise   -­‐   Implications   for   a   soft  
      paternalistic  implementation  strategy  of  LEDs  
The  Condorcet  Jury  Theorem  defends  Libertarian  Paternalism  in  different  ways.  
On  the  one  hand  it  can  provide  analytical  arguments  why  people  fail  to  achieve  

long-­‐term   goals,   namely   if   they   are   little   competent,   largely   influenced   and/or  
subject   to   contagion.   On   the   other   hand   the   Condorcet   Jury   Theorem   defends  
choice  architecture  against  the  knowledge  problem  and  the  question  who  should  
be  in  the  position  to  frame  choice  settings.    
The  delegation  of  decision-­‐making  to  a  Condorcet  Jury  translates  the  substantial  
criterion   for   nudging-­‐policies´   efficiency   –   the   voluntary   approvability   of   the  
recommended   choices   –   to   the   level   of   the   paternalistic   policy   maker   and  
heightens   the   libertarian   spirit   of   the   concept.   Thaler   and   Sunstein   imply   that  
potentially   approvable   choices   help   inpiduals   to   avoid   inpidual   errors
(Sunstein & Thaler, 2003),  the  CJT  proofs  that  the  approvability  of  choice  frames  
within   a   jury   results   in   correct   choice   architecture.   Its   applicability   as   normative  
criterion   for   guidelines   that   direct   paternalistic   policy   maker,   outside   the  
restrictive  analytical  framework  but  under  circumstances  that  fit  to  real  life  can  
be   justified   by   relaxing   the   assumptions   of   homogeneity   and   independence  
among   voter   such   as   extending   binary   choice   to   a   many-­‐option   case.   Relaxing  
these   assumptions,   one   can   conclude   that   in   the   case   of   pursuing   common  
interests,  the  Condorcet  Jury  Theorem  even  extends  to  large  electorates  and  the  
plurality   winner   of   a   democratic   vote   constitutes   a   reliable   truth-­‐tracker   of  
citizens´  true  preferences.    
What   implications   for   carrying   out   choice   framing   architecture   can   we   derive  
from   these   findings?     First,   the   extension   of   the   CJT   provides   a   narrow   definition  
in  which  situations  the  signals  about  true  preferences  directed  to  jury-­‐members  
are   expected   to   give   correct   information   about   inpidual   preferences,   namely  
when   people   share   common   interests   and   values,   and   goals   refer   to   collective  
social   welfare.   Second,   if   common   preferences   are   signalled   by   majority   votes,  
the   application   of   the   CJT   leads   to   a   twofold   safeguard   against   the   knowledge  
problem  on  the  level  of  citizen  and  on  jury  level  we  are  assured  to  get  the  right  
outcome.   This   justifies   the   delegation   of   the   deliberation   process   about   correct  
choices  and  the  decision-­‐making  to  a  Condorcet-­‐jury.    

Libertarian   paternalists   assume,   that   inpidual   long-­‐term   and   meta-­‐preferences  
do  exist  but  rather  in  an  expressive  form.  Given  a  certain  majority  that  expresses  
long-­‐term   values   and   signals   these   true   preferences   to   a   juror,   then   the   outcome  
of   a   majority   vote   in   a   jury,   where   jurors   reveal   private   information   and   vote  
than   optimally   can   a)   decide   whether   signalled   preferences   are   indeed   true   or  
false,   and   b)   which   option   within   a   choice   setting   would   be   the   hypothetically  
approvable   and   thus   the   right   one,   and   c)   how   this   option   should   be  
recommended   by   a   nudge   like   a   starting   points,   a   default   option   or   other  
incentives   mentioned   by   Thaler   and   Sunstein.   Welfare   judgements   are   then   no  
more  subject  to  biased  inpidual  choices,  but  to  the  deliberation  process  and  the  
decision-­‐making   competence   of   a   jury,   whose   expert-­‐members   distinguish  
themselves   by   high   inpidual   competence   and   maximize   jury   competence  
already   at   small   jury   size.   Condorcet-­‐juries   then   enable   to   run   an   effective  
strategy   in   order   to   boost   social   values   and   long-­‐term   goals   without   imposing  
taxes  or  bans  on  inpiduals.    
True   preferences   can   be   observed   either   by   referring   to   empirical   studies   and  
surveys  as  already  mentioned  by  Thaler  and  Sunstein  or  they  can  be  expressed  
by   voting   in   opinion   polls   when   people   answer   from   a   long-­‐term   perspective.  
This   kind   of   “voting”   applies   directly   to   the   notion   of   Rousseau’s   general   will.  
True   preferences   however   can   also   be   expressed   by   consumers´   choices   and  
explicit   changes   in   inpidual   work-­‐,   leisure-­‐   or   especially   consumption-­‐
behaviour.  Consumers  would  then  “vote  by  foot”.  These  changes  then  are  based  
upon  an  explicit  and  reflective  decision  against  previous  behavioural  pattern  and  
potentially  signal  true  preferences,  if  explicit  changes  in  inpidual  behaviour  are  
greatly   appreciated,   so   that   they   find   a   strong   and   increasing   consent   among   the  
population   and   may   lead   to   behavioural   turnarounds.   In   this   case   a   subsidiary  
organisation   and   implementation   of   Condorcet-­‐juries   offers   promising  
possibilities  for  the  application  of  the  Condorcet  Jury  Theorem  and  weaken  the  
argument   found   in   Rizza   about   missing   local   knowledge   of   a   planner   (Rizzo &
Whitman, 2009, p. 905f).   As   local   juries   are   close   in   touch   with   people   they   can  
examine   rather   quickly   and   in   a   differentiated   manner   whether   collective  
changes   introduce   a   behavioural   turnaround   a   or   not   and   examine   if   such   a  

paradigm   shift   of   consumption   behaviour   involves   a   pareto-­‐improvement.   If  
there   is   a   pareto-­‐improvement   to   be   expected,   a   citizen-­‐friendly   jury   is   able   to  
decide   optimally   how   to   support   in   a   well-­‐directed   manner   welfare-­‐enhancing  
behavioural  trends  and  then  derive  choice  frames  to  promote  the  desired  option.  
A   structure   of   implementing   expert   juries   according   to   the   subsidiary   principle  
would  enable  them  to  catch  and  boost  best  possible  the  dynamics  of  new  social  
values,   whenever   there   occurs   a   pareto-­‐efficient   change   of   population’s   ideas  
and   values.   In   particular   the   federal   structure   in   Germany   enables   an  
implementation   of   juries   with   a   subsidiary   character   to   advance   changes   in  
trends   that   have   emerged   in   the   recent   years,   like   trends   towards   consuming  
renewable   energies,   organic   food,   fair-­‐trade   as   well   as   sustainable   products   or  
the   support   of   local   and   regional   agriculture   and   economy.   The   subsidiary  
degree   determines   to   what   extent   a   successful   and   differentiated   inquiry   in  
common   preferences   is   feasible,   to   boost   these   preferences   and   respect   at   the  
same  time  the  plurality  and  subjectivity  of  inpidual  values.  
Thaler and Sunstein already mentioned the successful effect to save energy and
resources only through green default-options and information architecture, e.g. by
informing consumers about the anonymous energy consumption of same-sized
households in the neighbourhood on the energy consumption bill (Thaler & Sunstein,
2012). Energy supplier could set a green default option with the possibility to opt out
to another tariff. The example of the community of Schönau in the Black Forest
illustrates the power of default rules. The opt out rate of the green default to use other
energy sources than the environmental-friendly energy of Schönau Power Company
has been less than 1% in the recent years. Saving resources however can also be
implemented by setting default options on the working place like printer settings from
“print on a single-page” to “print on front-and-back (Sunstein & Reisch, 2014)”.
While “buying green” or in particular “buying organic” is often done for status
reasons information provision like symbols e.g. a “fair-trade” or “organic” seal
provides soft incentives. “Behaving green” however is less visible and due to
automatic and rapid judgement, people often fail to pursue this social long-term goal,
the concept of regional expert juries to design choice frames to use the large effect of

default rules offers promisingly possibilities to boost the transition in the use of

    8. A paternalistic implementation for LED bulbs
In the light of new challenges for environmental policies caused by climate change a
paradigm shift of consumers´ behaviour towards the consumption of sustainable LED
bulbs instead of the banned incandescent light bulbs or halogen bulbs offers a
promising success in facing the climate change challenges. Assuming that there is a
self-binding consent about the common long-term goal of saving energy to face the
climatic heating, nudging policies to foster LED bulb acceptance among consumers
offer a new perspective in environmental policies while retaining from bans and

Considering the consumption of sustainable LED bulbs, juries could optimally design
nudging strategies with respective policies, taking into account that even if there
exists the consent of energy-saving consumption, consumers often choose less
expensive light bulbs than sustainable LED. Either they run an immediate cost-benefit
analysis and suffer a hyperbolic discounting, or they are unaware about the particular
attributes of LEDs (like amount of lumen or light-colour) their respective preferences
and spare the search costs for their inpidual appropriate “good of light”. A
differentiated implementation of a jury would mean: one has to develop which
expertise of jurors does best meet the respective target group of consumers. Private
consumers, huge enterprises, factories where workers work night shifts or public
institutions like schools or day-nurseries will have different preferences regarding
light-colour, light-power (lumen) or quantities. Juries implemented close to respecting
consumers can absorb signals about different preferences regarding the attributes of
LED bulbs, the willingness to pay to pursue the long-term “sustainability- preference”
and the intense of this preference. Observing different target groups a Condorcet jury
are as well able to identify for which reasons some consumers might not follow these
preferences. After a deliberation process within a Condorcet jury, experts decide
about strategies to establish and boost preferences for sustainable lightning systems
with aiming for example to an increase of the willingness to pay thanks to a deeper
understanding of the value “sustainability”, or by providing information about the
different attributes of LEDs to minimize the search costs of uninformed consumers.

    9. Conclusion  
This paper argues that the character of consensus of libertarian paternalism justifies
its profitability and implies reliability on majority votes. The Condorcet   Jury  
Theorem   provides an analytical approach to defend libertarian paternalism against
the knowledge problem. Turning theory into reality, The Condorcet   Jury   Theorem   is
able to justify choice framing interference in inpidual decision-making referring to
common values. This form of social nudging is promising in areas like consumer or
environmental protection, social justice and sustainability in the use of resources,
where inpiduals often fail to act according to long-term goals, due to cognitive
shortcomings. However, interference in the purely inpidual lifestyle can only be
justified if there are collective values to develop of how a “correct” life-balance
should look like. Whether people should be nudged to “help” them facing self-control
problems, which consequences has to bear only the inpidual himself e.g. by
promoting healthy food or higher savings, depends if at all a collective moral concept
about e.g. “a healthier-lifestyle” or “a sustainable retirement” exists, that still respects
plurality and subjectivity of inpidual values. In this case the critics about a missing
theoretical underpinning or a “Nanny-State” may be fair. Examining a soft
paternalistic implementation of sustainable LEDs to face the challenge of climate
warming I conclude: if and to which degree of interference into inpidual decisions
and life-balance, a Condorcet jury will be a wise planner and able to derive common
preferences and values depends on the subsidiary degree of jury-implementation. The
more citizen-friendly choice framing and decision-making is delegated the closer to
citizens everyday needs can choice frames be set. Referring to Rizzo (2009) who
acknowledges: “Yet friends and family are more likely than policymakers to have the
local knowledge necessary to make wise decisions” (Rizzo & Whitman, 2009, p. 924)
In general and referring to the most famous examples of Sunstein and Thaler, a
parent’s or works council may debate about the arrangement of healthy and unhealthy
food in the cafeteria or whether and how to implement saving plans. If necessary it
can decide whether to help those who would be grateful for a nudge to resist certain
temptations. Public institutions on higher institutional level however, should refrain
doing so, as they cannot be assured to respect private subjective preferences.
Regarding the pursuit of common long-term goals a so-called social nudging, in

particular the sustainable consumption of light and the increase of market acceptance
of LED, the Condorcet  Jury  Theorem  proofs that a Condorcet jury if implemented in
a subsidiary manner can successfully identify and promote preferences for sustainable
light consumption and respective LED attributes. The precision to observe and absorb
signals of “true” preferences increases in the degree of the intensity the subsidiary
principle will be applied. With regard to the implications of the Condorcet   Jury  
Theorem, we can be confident about a Condorcet jury to select the right option in a
choice setting based on signals of “true” preferences even outside the pure model-
framework and under realistic assumptions. The approach to implement Condorcet
juries in accordance with the subsidiary principle, allows to a large extend a precise
inquiry in inpidual preferences and offers promisingly possibilities to apply (social)
welfare-enhancing choice framing that respects subjectivity and plurality of inpidual
values, within institutional frameworks that are citizen-friendly and close to affected

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