Knowledge and Freedom: Evidence on the Relationship Between Information and Paternalism

TL;DR

This study explores how policymakers decide when to intervene in individual choices based on the decision-maker's knowledge and beliefs, revealing that increased knowledge reduces intervention and that policymakers often impose riskless options aligned with their own preferences.

Contribution

The paper introduces a theoretical framework and experimental evidence on how knowledge and beliefs influence paternalistic interventions and the use of information by policymakers.

Findings

Full knowledge reduces intervention rates by over 60%.

Policymakers prefer to have decision-makers make informed choices.

Interveners are less likely to provide information when they believe it aligns with their preferences.

Abstract

When is autonomy granted to a decision-maker based on their knowledge, and if no autonomy is granted, what form will the intervention take? A parsimonious theoretical framework shows how policymakers can exploit decision-maker mistakes and use them as a justification for intervention. In two experiments, policymakers ("Choice Architects") can intervene in a choice faced by a decision-maker. We vary the amount of knowledge decision-makers possess about the choice. Full decision-maker knowledge causes more than a 60% reduction in intervention rates. Beliefs have a small, robust correlation with interventions on the intensive margin. Choice Architects disproportionately prefer to have decision-makers make informed decisions. Interveners are less likely to provide information. As theory predicts, the same applies to Choice Architects who believe that decision-maker mistakes align with their own preference. When Choice Architects are informed about the decision-maker's preference, this information is used to determine the imposed option. However, Choice Architects employ their own preference to a similar extent. A riskless option is causally more likely to be imposed, being correlated with but conceptually distinct from Choice Architects' own preference. This is a qualification to what has been termed "projective paternalism."