When we make decisions for others, we assume that they have the same preferences as we do. And if they don't, we’ll impose our preferences on them. Research by UBS Foundation Professor Sandro Ambühl shows that this assumption and paternalistic interventions based on ideals lead to suboptimal results.

Assuming others share the same preferences and if not, imposing our preferences on them, leads to suboptimal results, a recent study be the University of Zurich shows.

Sugar tax, pensions or the regulation of financial lending, often decisions about what is good for us are taken on our behalf by other people or the state. Sandro Ambühl, Assistant Professor at the Department of Economics at the University of Zurich, and an international team of researchers investigated how and with what motivation people try to influence the behavior of their fellow human beings, and whether the results of such interventions increase overall welfare.

The Experiment in a nutshell

The team developed an experiment in which subjects had to choose between different options. The subjects were divided into two groups: choice architects and voters. The more patience an option required, the higher the payoff. Choice architects decided which options were available to voters. Choice architects were also able to remove options and make recommendations to voters.

Projecting one’s own ideals onto others

Most often, choice architects chose to limit voters' choices and remove those options that require less patience. The research also showed that choice architects who are themselves very patient sought to enforce this ideal of patience. They particularly restricted the choices of others and removed the impatient options. "These paternalistic interventions are motivated by the fact that choice architects assume that voters have the same preferences as they do," explains Sandro Ambühl.

Similar results emerged when the choice architects were asked about their attitudes toward specific political issues. It is not people who have a lot of debt themselves who think others would be helped if there were restrictions preventing such debt. On the contrary, it is people who have no debt who think the welfare of others could be improved if they were also not allowed to incur debt. And it tends to be people with a low body mass index (BMI) who are in favour of a sugar tax, not those who struggle with their weight.

Overreaching

Choice architects systematically underestimated the difference between their own preferences and voters' preferences. Their predictions of how many people would have chosen an option if they had not withheld it from them were also biased. Many choice architects therefore support interventions that were much more drastic than they assumed.

In summary

Sandro Ambühl summarizes the study's findings as follows: "People are more different than we think. If political interventions, e.g. the introduction of a sugar tax or debt restrictions, are based on personal intuition instead of objective data, we will be systematically wrong. We will use interventions that lead to lower overall welfare."