The hidden costs of nudging: Experimental evidence from reminders in fundraising

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

We document the hidden costs of a popular nudge and show how these costs distort policy making when neglected. In a field experiment with a charity, we find reminders increasing intended behavior (donations), but also increasing avoidance behavior (unsubscriptions from the mailing list). We develop a dynamic model of donation and unsubscription behavior with limited attention. We test the model in a second field experiment which also provides evidence that the hidden costs are anticipated. The model is estimated structurally to perform a welfare analysis. Not accounting for hidden costs overstates the welfare effects for donors by factor ten and hides potential negative welfare effects of the charity.

OriginalsprogEngelsk
TidsskriftJournal of Public Economics
Vol/bind157
Sider (fra-til)15-26
ISSN0047-2727
DOI
StatusUdgivet - 1 jan. 2018

ID: 210838480