Do Administrative Procedures Fix Cognitive Biases?

Abstract

This article uses survey experiments to assess whether administrative procedures fix cognitive bias. We focus on two procedural requirements: qualitative reason-giving and quantitative cost-benefit analysis (CBA). Both requirements are now firmly entrenched in the U.S. federal regulation-making. Multilateral organizations such as the World Bank, OECD, and EU have encouraged their broad diffusion across many national contexts. Yet CBA, in particular, remains controversial. Supporters of CBA claim it leads to more rational regulation, with Sunstein (2000) asserting that CBA can reduce cognitive biases. By contrast, we argue that procedures should be conceptualized as imperfect substitutes subject to diminishing marginal benefits. To test and illustrate this argument, we examine how each procedure individually and cumulatively modulates gain–loss framing, partisan-motivated reasoning, and scope insensitivity in a nationally representative sample. We find that one or both procedures decreased cognitive bias. CBA was the most helpful against partisan reasoning whereas reason-giving did little. Both procedures seem comparably effective against the other biases, although in each case only one of the two procedures produced reductions distinguishable from zero. We only find substantial synergies between the two procedures with respect to gain–loss framing. For the other biases, the combination of both procedures did not generate significant reductions over and above that achieved by the more effective procedure alone. We hypothesize that procedures will only fix cognitive biases if they disrupt bias-inducing mental processes, and we reconcile this proposition with our findings. We conclude by relating our framework to debates about the design of administrative procedures and describe a research agenda based upon rationality-improving procedures.