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

A-Tier
Journal: Journal of Public Economics
Year: 2018
Volume: 157
Issue: C
Pages: 15-26

Authors (2)

Damgaard, Mette Trier (not in RePEc) Gravert, Christina (Københavns Universitet)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:pubeco:v:157:y:2018:i:c:p:15-26
Journal Field
Public
Author Count
2
Added to Database
2026-01-25