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 costbenefit analysis (“CBA”). Both requirements are now firmly entrenched in U.S. federal regulationmaking. 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) explicitly proposing 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 the effects of gain/loss framing, partisan motivated reasoning, and scope insensitivity in a nationally representative sample. We find that one or both procedures decrease each cognitive bias. CBA is most helpful against partisan reasoning, where reason-giving does little, while each procedure is about as effective for the other biases, although in each case only one procedure produces cognitive benefits distinguishable from zero. We only find substantial synergies between the two procedures with respect to gain-loss framing. Layering on the less useful procedure does not significantly improve the other two cognitive biases. We hypothesize that procedures will only fix cognitive biases if they disrupt bias-inducing mental processes, and reconcile this proposition with our findings. We conclude by relating this work to debates about the design of administrative procedures and describe a research agenda around rationality-improving procedures.