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Everyone believes in redemption: Nudges and overoptimism in costly task completion


  • Tasoff, Joshua
  • Letzler, Robert


We elicit subjects’ beliefs about the likelihood that they will redeem a mail-in form. Expected redemption rates exceed actual redemption rates by 49 percentage points, meaning that subjects are overoptimistic about their likelihood of redemption. We test the impact of three “nudges” on overoptimism: (1) informing subjects about a previous cohort's redemption rates, (2) reminding subjects about the redemption deadline, and (3) reducing transaction costs. The first two treatments reduced overoptimism by 7 and 8 percentage points respectively, but these effects were not significant. Only the third nudge had a significant effect and it reduced overoptimism by 26 percentage points. All three nudges increased redemption but had no statistically significant effect on beliefs. Our results suggest that weak cost-salience is an important mechanism for overoptimism.

Suggested Citation

  • Tasoff, Joshua & Letzler, Robert, 2014. "Everyone believes in redemption: Nudges and overoptimism in costly task completion," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 107-122.
  • Handle: RePEc:eee:jeborg:v:107:y:2014:i:pa:p:107-122
    DOI: 10.1016/j.jebo.2014.08.011

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    Cited by:

    1. Ori Heffetz & Ted O'Donoghue & Henry S. Schneider, 2016. "Forgetting and Heterogeneity in Task Delay: Evidence from New York City Parking-Ticket Recipients," NBER Working Papers 23012, National Bureau of Economic Research, Inc.
    2. Royal, Andrew & Tasoff, Joshua, 2017. "When higher productivity hurts: The interaction between overconfidence and capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 67(C), pages 131-142.
    3. Emma Boswell Dean & Frank Schilbach & Heather Schofield, 2017. "Poverty and Cognitive Function," NBER Chapters,in: The Economics of Poverty Traps National Bureau of Economic Research, Inc.

    More about this item


    Overoptimism; Overconfidence; Nudges; Rebates; Weak cost-salience;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection


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