An old measure of decision-making quality sheds new light on paternalism

Definitive judgment about the quality of decision-making is made difficult by twin problems of measurement and identification. A measure of decision-making quality is hard to formalize, to quantify, and to make practical for use in a variety of choice environments; and it is difficult to distinguish differences in decisionmaking quality from unobserved differences in preferences, information, beliefs, or constraints. In this paper, we describe a widely applicable set of tools for theoretical analysis and experimental methods for addressing these problems. These tools and methods can indicate a more targeted approach to “light paternalism“ polices aimed at improving decision-making quality.