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Toward an Understanding of the Welfare Effects of Nudges: Evidence from a Field Experiment in the Workplace

Author

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  • Erwin Bulte
  • John A List
  • Daan van Soest

Abstract

Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compared output levels across 1,000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labour. The estimated welfare costs of using the loss contract are quite modest—perhaps because the loss contract is viewed as a (soft) commitment device.

Suggested Citation

  • Erwin Bulte & John A List & Daan van Soest, 2020. "Toward an Understanding of the Welfare Effects of Nudges: Evidence from a Field Experiment in the Workplace," The Economic Journal, Royal Economic Society, vol. 130(632), pages 2329-2353.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:632:p:2329-2353.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa054
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    Citations

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    Cited by:

    1. Shikuku, Kelvin Mashisia & Bulte, Erwin & Lagerkvist, Carl Johan & Tran, Nhuong, 2021. "The Formation of Reference Points in Consumer Choice Behavior: Experimental Evidence from a Fish Market in Nigeria," 2021 Conference, August 17-31, 2021, Virtual 314964, International Association of Agricultural Economists.
    2. Solomon Balew & Erwin Bulte & Zewdu Abro & Menale Kassie, 2023. "Incentivizing and nudging farmers to spread information: Experimental evidence from Ethiopia," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 994-1010, May.
    3. Bauhoff,Sebastian Peter Alexander & Kandpal,Eeshani, 2021. "Information, Loss Framing, and Spillovers in Pay-for-Performance Contracts," Policy Research Working Paper Series 9687, The World Bank.
    4. Keenan, Michael & Pamuk, Haki & Ng'ang'a, Stanley Karanja & Hella, Joseph Phillip, 2021. "Investment and Household Bargaining in Small-scale Farming Households A Lab-in-the-Field Experiment from Rural Tanzania," 2021 Conference, August 17-31, 2021, Virtual 315291, International Association of Agricultural Economists.
    5. Bulte, Erwin & List, John A. & van Soest, Daan, 2021. "Incentive spillovers in the workplace: Evidence from two field experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 137-149.
    6. Paul J. Ferraro & J. Dustin Tracy, 2022. "A reassessment of the potential for loss-framed incentive contracts to increase productivity: a meta-analysis and a real-effort experiment," Experimental Economics, Springer;Economic Science Association, vol. 25(5), pages 1441-1466, November.
    7. Kelvin Mashisia Shikuku & Erwin Bulte & Carl Johan Lagerkvist & Nhuong Tran, 2023. "Endowments, expectations, and the value of food safety certification: experimental evidence from fish markets in Nigeria," Experimental Economics, Springer;Economic Science Association, vol. 26(5), pages 1060-1084, November.
    8. Lohmann, Paul M. & Gsottbauer, Elisabeth & Doherty, Anya & Kontoleon, Andreas, 2022. "Do carbon footprint labels promote climatarian diets? Evidence from a large-scale field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    9. Perino, Grischa & Schwirplies, Claudia, 2022. "Meaty arguments and fishy effects: Field experimental evidence on the impact of reasons to reduce meat consumption," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    10. Cettolin, Elena & Cole, Kym & Dalton, Patricio, 2022. "Improving Workers’ Performance in Small Firms : A Randomized Experiment on Goal Setting in Ghana," Other publications TiSEM d0f494f0-87ed-4ef2-8472-6, Tilburg University, School of Economics and Management.

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