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When the message hurts: The unintended impacts of nudges on saving

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  • Andrieş, Alin Marius
  • Walker, Sarah

Abstract

We implement a field experiment in Romania to elucidate how informational nudges and goal setting impact saving. We find no evidence that text message reminders, either in the form of a general reminder or information about the saving goals of peers, encourage saving. Further, both types of messages discourage saving for participants who set a goal, particularly among high goal setters. We posit that informational nudges unintentionally increase the salience of unrealistic goals and engender boomerang effects that discourage high goal setters from saving. Among participants who received no messages, those who set goals save more, suggesting a tradeoff between commitment devices and informational nudges in this context.

Suggested Citation

  • Andrieş, Alin Marius & Walker, Sarah, 2023. "When the message hurts: The unintended impacts of nudges on saving," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 439-456.
    • Handle: RePEc:eee:jcecon:v:51:y:2023:i:2:p:439-456
    DOI: 10.1016/j.jce.2023.01.002
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    More about this item

    Keywords

    Saving; Nudges; Commitment devices; Reminders; Peer information; Goal setting; Boomerang effects; Middle-income; Romania;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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