Free to Fail? Paternalistic Preferences in the United States

Abstract

This paper examines paternalistic preferences in large-scale experiments in the U.S. Participants decide whether to intervene to prevent a stakeholder, mistaken about their options, to make a choice that is misaligned with their preferences. We find that the willingness to intervene strongly depends on the nature of the paternalistic intervention: only a minority implements a hard intervention that limits the freedom to choose, while a majority implements a soft intervention that provides information without restricting the choice set. Based on a theoretical framework, we estimate that about half of the participants are welfarists, while a third are libertarian paternalists.

Keywords: paternalism, libertarian paternalism, welfarism, freedom to choose

JEL Classification: C91, C93, D69, D91