ABSTRACT
In the context of strategic interactions, individuals sometimes find themselves better off when they have fewer options. This mechanism is known under the name of ‘strategic commitment’, as it is usually the individuals themselves who ‘commit’ to following a certain course of action by restricting their options; but that is not necessary. I explain how a paternalistic intervention may be conceived where it is a third party who paternalistically restricts rational individuals’ choices to improve their welfare. This kind of intervention, which I call ‘strategic paternalism’, contradicts the narrative according to which welfare economics is incompatible with paternalism because it assumes individual rationality, which would make paternalism irrelevant. To prove this point, I show why and in what sense this ‘strategic paternalism’ deserves to be called that way.
Acknowledgement
I would like to express my gratitude to the two anonymous referees for their insightful comments, which have improved significantly the quality of this paper.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 ‘We call the use of behavioural economics to justify paternalistic interventions `behavioural paternalism’’. (Rizzo & Whitman, Citation2020, p. 16).
2 ‘Behavioural economics extends the paternalistically category of idiots to include most people at predictable times’ (Camerer et al., Citation2003, p. 1218).
3 ‘as judged by themselves’, according to Thaler and Sunstein (Citation2008, p. 5).
4 The literature devoted to amending traditional welfare economics to take into account the lessons of behavioural economics is referred to as behavioural welfare economics. It must be distinguished from behavioural paternalism as some approaches described in this literature are not necessarily paternalistic. See Thoma (Citation2021) on this.
5 See also Hausman (Citation2018), Saint-Paul (Citation2011), Rizzo and Whitman (Citation2020).
6 In the following, I will refer to these properties (in addition to completeness, transitivity) when saying that preferences are rational. More will be said about rationality in a strategic setting in the following.
7 The definition I will use do not include this concern about pluralism. It is enough for my purpose that this definition gives a sufficient condition for identifying acts of paternalism.
8 As emphasized by Robert Sugden: `welfare economists often say that, in using preference-satisfaction as a normative criterion for assessing public policies, they are treating each individual as the best judge of his own welfare. In this sense, neoclassical welfare economics can claim to uphold the non-paternalism of the liberal tradition' (Sugden, Citation2018, p. 6). Behavioural paternalism breaks with this tradition.
9 This is simply the idea that each individual is the best judge of his welfare (See for example Blaug, Citation1992, p. 125 for a reference).
10 See Sunstein (Citation2014, p. 61): ‘to the extent that [laws] solve a collective action problem, they should not be seen as paternalistic at all’. See also Le Grand and New (Citation2015).
11 For example, ‘we have no interest in telling people what to do. We want to help them achieve their own goals (…) We just want to reduce what people would themselves call errors’ (Thaler, Citation2015, p. 325) This idea is further developed in Sunstein (Citation2014), and Le Grand and New (Citation2015). Conly (Citation2013) also endorses means paternalism.
12 This is in particular what Sunstein (Citation2014) does.
13 See Sunstein (Citation2014), Le Grand and New (Citation2015).
14 This is the point defended by Le Grand and New (Citation2015): ‘To intervene in this `reason’ would be means-related paternalism; to question the `passions’ themselves would be ends-related’.
15 More generally, the two are equivalent provided that we choose the right order of elimination of weakly dominated strategies that eliminates all strategies but the subgame perfect equilibrium of the game.
16 This may be called ‘bayesian rationality’ after Aumann (Citation1987).
17 The paper will not discuss the precise epistemic foundations of a subgame perfect equilibrium. See Aumann (Citation1995) for an epistemic justification of backward induction.
18 Elster (Citation2000) mentions two other ways to commit by altering the material conditions of choice (rather than renouncing rationality): make options available with a delay or insulating oneself from knowledge about their existence.
19 The logic of a threat, as underlined by Schelling (Citation1980), is that consequences only need to be carried out only if the threat is not successful (contrary to the promise).
20 See Fudenberg and Tirole (Citation1991), Kreps (Citation1990).
21 For a historical perspective on the formation and evolution of the concept of commitment in Schelling’s thought, see Fontaine (Citation2024).
22 Emphasis is not mine.
23 If the interaction between the pirates and the travellers were repeated, fighting back or not paying the pirate could become rational, in the sense defined earlier. It is assumed here that such a repetition does not occur.
24 Emphasis is not mine.
25 Another way to bypass mandatory secret ballot is to allow voting by mail, as emphasized by Johnson and Orr (Citation2020). See their book for details on the institutional arrangements that make secret ballot strategically effective.
26 See Page (Citation2022).
Additional information
Notes on contributors
Kevin Leportier
Kevin Leportier is a Ph.D. candidate in Economics at University Paris 1 Panthéon-Sorbonne, Centre d'Économie de la Sorbonne. His thesis focuses on the links between commitment and freedom, from the perspective of normative economics.