How Nudges Can Help Regulate New Technologies

New technologies are being introduced in markets around the globe.  Disruptive innovations such as blockchain, cryptocurrencies, the Internet of things, automated cars and other products that support decision-making based on artificial intelligence (AI) are offering a creative take on traditional markets. Yet these technologies frequently require regulatory intervention to protect consumers or prevent systemic risks. One of the main challenges for regulating new technologies is insufficient technological knowledge by the regulators. The industry is invariably more informed about the subject matter than the regulators and is more likely to tailor regulation by private ordering. In these circumstances, we argue, “nudge” … Read more