Social policy appraisal depends on assumptions that are made about individual motivation and individual behaviour. In recent years greater weight has been given to behavioural characteristics which are typical of homo-economicus. At the same time, a growing body of evidence from experimental economics and from cognitive psychology identifies a ‘richer’ characterisation of individual behaviour. Allowance must be made for ‘individual failure’ and for preference endogeneity when designing and implementing social policy. A ‘broader’ agenda is required when evaluating social policies. When designing social policy greater emphasis must be placed on the ‘demonstration effect’.