7 - Knowledge Problems in Paternalist Policymaking

Summary

Paternalist policymakers face a severe knowledge problem that is analogous to the knowledge problem faced by central planners. They do not and often cannot possess the kind of local and tacit knowledge needed to craft policy interventions that reliably improve human welfare. We provide a taxonomy of types of knowledge that paternalist planners need but typically do not have: true preferences, extent of bias, self-debiasing and small-group debiasing, dynamic impacts on self-regulation, counteracting behaviors, bias interactions, and population heterogeneity. We also critique two leading efforts to surmount knowledge problems of behavioral paternalism: the augmented revelatory frame approach and unified behavioral revealed preference.