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The Double Dividend of Nudges

Author

Listed:
  • Steffen Altmann

    (University of Duiburg-Essen, University of Copenhagen)

  • Andreas Grunewald

    (Frankfurt School of Finance and Management)

  • Jonas Radbruch

    (HU Berlin)

Abstract

Nudge-based policies are an important instrument for many policymakers. Based on a laboratory experiment featuring a dual-task paradigm, we examine the effects of two common types of nudge interventions—the simplification of complex decisions and the implementation of high-quality defaults. We find that these interventions do not only improve choices in the targeted domain, but also yield substantial positive indirect effects on non-targeted domains. The latter emerge through a reallocation of cognitive resources. Furthermore, the relative importance of direct and indirect effects varies systematically across the population. Evaluations that focus only on the targeted domain therefore significantly underestimate the interventions’ overall effectiveness and provide a biased assessment of their distributional consequences.

Suggested Citation

  • Steffen Altmann & Andreas Grunewald & Jonas Radbruch, 2024. "The Double Dividend of Nudges," Rationality and Competition Discussion Paper Series 503, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:503
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    References listed on IDEAS

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    Keywords

    nudges; default options; administrative burden; limited attention; limited cognitive resources; behavioral economics; laboratory experiment;
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