It seems obvious that regulation requires the revelation of private information, because legal interventions can do harm when they are designed with insufficient information about individuals’ preferences and other variables. Nevertheless, academic observers and lawmakers often identify a market failure or constituent need and then proceed to favor a specific legal intervention as if its intensity were of little significance. The right intensity, or even a level that does more good than harm, can be difficult to determine. It is apparent that regulation is more likely to improve social welfare when its intensity reflects accurate information about the costs and benefits it generates. At the same time, if revelation imposes emotional or other costs, then welfare can be improved if law camouflages true preferences.
One aim of this Article is to add self-revelation to the calculus surrounding government intervention. Consequently, the focus is on internalities—that is, the class of problems in which intervention might be sought to deal with problems of self-control, broadly defined. Internality-driven interventions expose the need for one kind of information revelation because the essence of the interventionist claim is that the present self seeks to constrain the future self. But how do we evaluate the costs imposed on the future self and how do we assess the benefits to either self? Aspiring nonsmokers, for example, might seek help in the form of taxes or bans on cigarettes, but how do we know how high or extensive those restrictions should be?