Suboptimal Paternalism: Ability, Benevolence, and Self-Selection in Choosing for Others

65 Pages Posted: 16 Sep 2019

See all articles by Felix Døssing

Felix Døssing

University of Copenhagen - Department of Economics

David Dreyer Lassen

University of Copenhagen

Date Written: September 5, 2019

Abstract

Discussions about the legitimacy and welfare consequences of paternalistic interventions usually begin with the assumption that regulators are both benevolent and competent. We present experimental evidence that neither need be the case. In our experiment, individuals choose whether to restrict the choice of another participant and we see that regulation, on average, decreases choice efficiency. While more competent regulators are more likely to restrict choice sets in order to improve welfare for subjects when they use their regulatory privilege, selection into being an active regulator is unrelated to competence. The propensity for kind regulation is increasing in own competence, while the propensity for unkind regulation is both negatively related to own competence and positively related to the competence of the subject.

Keywords: paternalism, choosing for others, risk preferences, beneficence

JEL Classification: C91, D60, D62, D64, D91

Suggested Citation

Døssing, Felix and Lassen, David Dreyer, Suboptimal Paternalism: Ability, Benevolence, and Self-Selection in Choosing for Others (September 5, 2019). Available at SSRN: https://ssrn.com/abstract=3448513 or http://dx.doi.org/10.2139/ssrn.3448513

Felix Døssing

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

David Dreyer Lassen (Contact Author)

University of Copenhagen ( email )

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