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Policy overreaction

  • Moshe Maor (a1)

The literature on policy success and failure does not capture policies that may be too successful, as well as “too much” and/or “too soon” patterns of policy. To bridge this gap, this conceptual article relies on one of the most robust findings in the psychology of judgement, namely that many people are overconfident, prone to place too much faith in their intuitions. Based on this premise, the analytical framework advanced here revolves around two key dimensions of policy overreaction: (i) the effects of positive and negative events, and (ii) the effects of overestimation and accurate estimation of information. Based on these dimensions, the article identifies and illustrates four distinct modes of policy overreaction that reflect differences in the nature of implemented policy. It argues that the policy tools menu utilised in each mode of policy overreaction is dominated by unique mechanisms for changing or coordinating behaviour, which, once established, produce excessive – objective and/or perceived – social costs.

Corresponding author
Moshe Maor Wolfson Family Professor of Public Administration Department of Political Science The Hebrew University of Jerusalem Mount Scopus Jerusalem 91905 Israel Tel.: +972 2588 3454 Fax: +972 2588 1333 Email:
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