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Can nudges be transparent and yet effective?

Author

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  • Bruns, Hendrik
  • Kantorowicz-Reznichenko, Elena
  • Klement, Katharina
  • Luistro Jonsson, Marijane
  • Rahali, Bilel

Abstract

Nudges receive growing attention as an effective concept to alter people’s decisions without significantly changing economic incentives or limiting options. However, being often very subtle and covert, nudges are also criticized as unethical. By not being transparent about the intention to influence individual choice they might be perceived as limiting freedom of autonomous actions and decisions. So far, empirical research on this issue is scarce. In this study, we investigate whether nudges can be made transparent without limiting their effectiveness. For this purpose we conduct a laboratory experiment where we nudge contributions to carbon emission reduction by introducing a default value. We test how different types of transparency (i.e. knowledge of the potential influence of the default, its purpose, or both) influence the effect of the default. Our findings demonstrate that the default increases contributions, and information on the potential influence, its purpose, or both combined do not significantly influence the default effect. Furthermore, we do not find evidence that psychological reactance interacts with the influence of transparency. Findings support the policy-relevant claim that nudges (in the form of defaults) can be transparent and yet effective.

Suggested Citation

  • Bruns, Hendrik & Kantorowicz-Reznichenko, Elena & Klement, Katharina & Luistro Jonsson, Marijane & Rahali, Bilel, 2018. "Can nudges be transparent and yet effective?," Journal of Economic Psychology, Elsevier, vol. 65(C), pages 41-59.
    • Handle: RePEc:eee:joepsy:v:65:y:2018:i:c:p:41-59
    DOI: 10.1016/j.joep.2018.02.002
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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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