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Informational Requirements of Nudging

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  • Jean-Michel Benkert
  • Nick Netzer

Abstract

A nudge is a paternalistic government intervention that attempts to improve choices by changing the framing of a decision problem. We propose a welfare-theoretic foundation for nudging similar in spirit to the classical revealed preference approach, by investigating a framework in which preferences and mistakes of an agent can be elicited from her choices under different frames. We provide characterizations of the classes of behavioral models in which the information required for nudging can or cannot be deduced from choice data.

Suggested Citation

  • Jean-Michel Benkert & Nick Netzer, 2018. "Informational Requirements of Nudging," Journal of Political Economy, University of Chicago Press, vol. 126(6), pages 2323-2355.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/700072
    DOI: 10.1086/700072
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    5. B. Douglas Bernheim, 2009. "Behavioral Welfare Economics," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 267-319, 04-05.
    6. Ariel Rubinstein & Yuval Salant, 2012. "Eliciting Welfare Preferences from Behavioural Data Sets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 375-387.
    7. Richard H. Thaler & Cass R. Sunstein, 2023. "Libertarian paternalism," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 1, pages 10-16, Edward Elgar Publishing.
    8. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 51-104.
    9. Yuval Salant & Ariel Rubinstein, 2008. "(A, f): Choice with Frames -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1287-1296.
    10. , & ,, 2006. "A model of choice from lists," Theoretical Economics, Econometric Society, vol. 1(1), pages 3-17, March.
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    Citations

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    Cited by:

    1. Thomas Mariotti & Nikolaus Schweizer & Nora Szech & Jonas von Wangenheim, 2023. "Information Nudges and Self-Control," Management Science, INFORMS, vol. 69(4), pages 2182-2197, April.
    2. Damgaard, Mette Trier, 2021. "A decade of nudging: What have we learned?," Nationaløkonomisk tidsskrift, Nationaløkonomisk Forening, vol. 2021(1), pages 1-21.
    3. Breitmoser, Yves, 2017. "Discrete Choice with Presentation Effects," Rationality and Competition Discussion Paper Series 35, CRC TRR 190 Rationality and Competition.
    4. Carlos Alós-Ferrer & Ernst Fehr & Nick Netzer, 2021. "Time Will Tell: Recovering Preferences When Choices Are Noisy," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1828-1877.
    5. Steiner, Jakub & Netzer, Nick & Robson, Arthur & Kocourek, Pavel, 2021. "Endogenous Risk Attitudes," CEPR Discussion Papers 16190, C.E.P.R. Discussion Papers.
    6. Breitmoser, Yves, 2016. "The axiomatic foundation of logit and its relation to behavioral welfare," MPRA Paper 71632, University Library of Munich, Germany.
    7. Marco Fabbri & Michael Faure, 2018. "Toward a “constitution” for behavioral policy-making," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(3), pages 241-270, September.
    8. Ayoubi, Charles & Thurm, Boris, 2020. "Pro-environmental behavior and morality: An economic model with heterogeneous preferences," OSF Preprints w8afg, Center for Open Science.
    9. Eric Bettinger & Nina Cunha & Guilherme Lichand & Ricardo Madeira, 2020. "Are the effects of informational interventions driven by salience?," ECON - Working Papers 350, Department of Economics - University of Zurich, revised May 2021.
    10. Andrew Caplin & Daniel J. Martin, 2020. "Framing, Information, and Welfare," NBER Working Papers 27265, National Bureau of Economic Research, Inc.
    11. Mette T. Damgaard, 2020. "A decade of nudging: What have we learned?," Economics Working Papers 2020-07, Department of Economics and Business Economics, Aarhus University.
    12. Mia Lu & Nick Netzer, 2022. "The swaps index for consumer choice," ECON - Working Papers 418, Department of Economics - University of Zurich, revised May 2023.
    13. Jean-Michel Benkert, 2022. "Bilateral Trade with Loss-Averse Agents," Diskussionsschriften dp2203, Universitaet Bern, Departement Volkswirtschaft.

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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