The Pledging Puzzle: How Can Revocable Promises Increase Charitable Giving


Paper by James Andreoni and Marta Serra-Garcia: “What is the value of pledges if they are often reneged upon? In this paper we show – both theoretically and experimentally – that pledges can be used to screen donors and to better understand their motives for giving. In return, nonprofit managers can use the information they glean from pledges to better target future charitable giving appeals and interventions to donors, such as expressions of gratitude. In an experiment, we find that offering the option to pledge gifts induces self-selection. If expressions of gratitude are then targeted to individuals who select into pledges, reneging can be significantly reduced. Our findings provide an explanation for the potential usefulness of pledges….(More)”.

Private Law, Nudging and Behavioural Economic Analysis: The Mandated-Choice Model


Book by Antonios Karampatzos: “Offering a fresh perspective on “nudging”, this book uses legal paternalism to explore how legal systems may promote good policies without ignoring personal autonomy.

It suggests that the dilemma between inefficient opt-in rules and autonomy restricting opt-out schemes fails to realistically capture the span of options available to the policy maker. There is a third path, namely the ‘mandated-choice model’. The book is dedicated to presenting this model and exploring its great potential. Contract law, consumer protection, products safety and regulatory problems such as organ donation or excessive borrowing are the setting for the discussion. Familiarising the reader with a hot debate on paternalism, behavioural economics and private law, this book takes a further step and links this behavioural law and economics discussion with philosophical considerations to shed a light on modern challenges, such as organ donation or consumers protection, by adopting an openly interdisciplinary approach….(More)”.

Robotic Bureaucracy: Administrative Burden and Red Tape in University Research


Essay by Barry Bozeman and Jan Youtie: “…examines university research administration and the use of software systems that automate university research grants and contract administration, including the automatic sending of emails for reporting and compliance purposes. These systems are described as “robotic bureaucracy.” The rise of regulations and their contribution to administrative burden on university research have led university administrators to increasingly rely on robotic bureaucracy to handle compliance. This article draws on the administrative burden, behavioral public administration, and electronic communications and management literatures, which are increasingly focused on the psychological and cognitive bases of behavior. These literatures suggest that the assumptions behind robotic bureaucracy ignore the extent to which these systems shift the burden of compliance from administrators to researchers….(More)”.

Nudging the Nudger: Toward a Choice Architecture for Regulators


Working Paper by Susan E. Dudley and Zhoudan Xie: “Behavioral research has shown that individuals do not always behave in ways that match textbook definitions of rationality. Recognizing that “bounded rationality” also occurs in the regulatory process and building on public choice insights that focus on how institutional incentives affect behavior, this article explores the interaction between the institutions in which regulators operate and their cognitive biases. It attempts to understand the extent to which the “choice architecture” regulators face reinforces or counteracts predictable cognitive biases. Just as behavioral insights are increasingly used to design choice architecture to frame individual decisions in ways that encourage welfare-enhancing choices, consciously designing the institutions that influence regulators’ policy decisions with behavioral insights in mind could lead to more public-welfare-enhancing policies. The article concludes with some modest ideas for improving regulators’ choice architecture and suggestions for further research….(More)”.

Community Colleges Boost STEM Student Success Through Behavioral Nudging


Press Release: “JFF, a national nonprofit driving transformation in the American workforce and education systems, and Persistence Plus, which pairs behavioral insights with intelligent text messaging to improve student success, today released the findings from an analysis that examined the effects of personalized nudging on nearly 10,000 community college students. The study, conducted over two years at four community colleges, found that behavioral nudging had a significant impact on student persistence rates—with strong improvements among students of color and older adult learners, who are often underrepresented among graduates of STEM (science, technology, engineering, and math) programs.

“These results offer powerful evidence on the potential, and imperative, of using technology to support students during the most in-demand, and often most challenging, courses and majors,” said Maria Flynn, president and CEO of JFF. “With millions of STEM jobs going unfilled, closing the gap in STEM achievement has profound economic—and equity—implications.” 

In a multiyear initiative called “Nudging to STEM Success, which was funded by the Helmsley Charitable Trust, JFF and Persistence Plus selected four colleges to implement the nudging initiative campuswide:Lakeland Community College in Kirtland, Ohio; Lorain County Community College in Elyria, Ohio; Stark State College in North Canton, Ohio; and John Tyler Community College in Chester, Virginia.

A randomized control trial in the summer of 2017 showed that the nudges increased first-to-second-year persistence for STEM students by 10 percentage points. The results of that trial will be presented in an upcoming peer-reviewed paper titled “A Summer Nudge Campaign to Motivate Community College STEM Students to Reenroll.” The paper will be published in AERA Open, an open-access journal published by the American Educational Research Association. 

Following the 2017 trial, the four colleges scaled the support to nearly 10,000 students, and over the next two years, JFF and Persistence Plus found that the nudging support had a particularly strong impact on students of color and students over the age of 25—two groups that have historically had lower persistence rates than other students….(More)”.

The Nollywood Nudge: An Entertaining Approach to Saving


Paper by Aidan Coville, Vincenzo Di Maro, Felipe Dunsch and Siegfried Zottel: “This paper investigates the immediate and medium-term behavioral response to an emotional trigger designed to affect biases in intertemporal financial decisions. The emotional trigger is provided by a narrative portraying the catastrophic consequences of poor financial choices. Even when people are fully aware of the most appropriate action to take, cognitive biases may prevent this knowledge from translating into action.

The paper contributes to the literature by directly testing the importance of linking emotional stimulus to financial messages, to influence borrowing and saving decisions, and identifying the interaction between emotional stimulus and the opportunity to act on this stimulus. The study randomly assigned individuals to a featured production — a Nollywood (the Nigerian Hollywood) movie — on the financial consequences of poor borrowing and saving behavior. This treatment is interacted with the option of opening a savings account at the screening of the movie. At the exit of the screening, individuals in the financial education movie treatment are more likely to open a savings account than individuals in the placebo movie treatment. However, the effects dissipate quickly. When savings and borrowing behavior is measured four months later, the study finds no differences between treatments. The paper concludes that emotional triggers delivered in the context of a one-time feature film might not be enough to secure sustained changes in behavior….(More)”.

Behavioral Science and Climate Policy


Chapter by Michael Howlett and Stuti Rawat: “Behavioral science consists of the systematic analysis of processes underlying human behavior through experimentation and observation, drawing on knowledge, research, and methods from a variety of fields such as economics, psychology, and sociology. Because policymaking involves efforts to modify or alter the behavior of policy-takers and centers on the processes of decision-making in government, it has always been concerned with behavioral psychology. Classic studies of decision-making in the field derived their frameworks and concepts from psychology, and the founder of policy sciences, Harold Lasswell, was himself trained as a behavioral political scientist. Hence, it should not be surprising that the use of behavioral science is a feature of many policy areas, including climate change policy.

This is given extra emphasis, however, because climate change policymaking and the rise of climate change as a policy issue coincides with a resurgence in behaviorally inspired policy analysis and design brought about by the development of behavioral economics. Thus efforts to deal with climate change have come into being at a time when behavioral governance has been gaining traction worldwide under the influence of works by, among others, Kahneman and Tversky, Thaler, and Sunstein. Such behavioral governance studies have focused on the psychological and cognitive behavioral processes in individuals and collectives, in order to inform, design, and implement different modes of governing. They have been promoted by policy scholars, including many economists working in the area who prefer its insights to those put forward by classical or neoclassical economics.

In the context of climate change policy, behavioral science plays two key roles—through its use of behaviorally premised policy instruments as new modes of public policy being used or proposed to be used, in conjunction with traditional climate change policy tools; and as a way of understanding some of the barriers to compliance and policy design encountered by governments in combating the “super wicked problem” of climate change. Five kinds of behavioral tools have been found to be most commonly used in relation to climate change policy: provision of information, use of social norms, goal setting, default rules, and framing. A large proportion of behavioral tools has been used in the energy sector, because of its importance in the context of climate change action and the fact that energy consumption is easy to monitor, thereby facilitating impact assessment….(More)”.

E-Nudging Justice: The Role of Digital Choice Architecture in Online Courts


Paper by Ayelet Sela: “Justice systems around the world are launching online courts and tribunals in order to improve access to justice, especially for self-represented litigants (SRLs). Online courts are designed to handhold SRLs throughout the process and empower them to make procedural and substantive decisions. To that end, they present SRLs with streamlined and simplified procedures and employ a host of user interface design and user experience strategies (UI/UX). Focusing on these features, the article analyzes online courts as digital choice environments that shape SRLs’ decisions, inputs and actions, and considers their implications on access to justice, due process and the impartiality of courts. Accordingly, the article begins to close the knowledge gap regarding choice architecture in online legal proceedings. 

Using examples from current online courts, the article considers how mechanisms such as choice overload, display, colorfulness, visual complexity, and personalization influence SRLs’ choices and actions. The analysis builds on research in cognitive psychology and behavioral economics that shows that subtle changes in the context in which decisions are made steer (nudge) people to choose a particular option or course of action. It is also informed by recent studies that capture the effect of digital choice architecture on users’ choices and behaviors in online settings. The discussion clarifies that seemingly naïve UI/UX features can strongly influence users of online courts, in a manner that may be at odds with their institutional commitment to impartiality and due process. Moreover, the article challenges the view that online court interfaces (and those of other online legal services, for that matter) should be designed to maximize navigability, intuitiveness and user-friendliness. It argues that these design attributes involve the risk of nudging SRLs to make uninformed, non-deliberate, and biased decisions, possibly infringing their autonomy and self-determination. Accordingly, the article suggests that choice architecture in online courts should aim to encourage reflective participation and informed decision-making. Specifically, its goal should be to improve SRLs’ ability to identify and consider options, and advance their own — inherently diverse — interests. In order to mitigate the abovementioned risks, the article proposes an initial evaluation framework, measures, and methodologies to support evidence-based and ethical choice architecture in online courts….(More)”.

How mobile text reminders earned Madagascar a 32,900% ROI in collecting unpaid taxes


Paper by Tiago Peixoto et al : “Benjamin Franklin famously once said that “nothing can be said to be certain, except death and taxes.” In developing countries, however, tax revenues are anything but certain. Madagascar is a prime example, with tax collection as a share of GDP at just under 11 percent. This is low even compared with countries of similar levels of economic development, and well below what the government could reasonably collect to fund much-needed public services, such as education, health and infrastructure. 

Poor compliance by citizens who owe taxes remains a major reason for Madagascar’s low tax collection. Madagascar’s government has therefore made increasing tax revenue collection a high priority in its strategy for promoting sustainable economic growth and addressing poverty.

Reforming a tax system can take decades. But small measures, implemented with the help of technology, can help tax authorities improve compliance.  Our team at the World Bank jointly conducted a field experiment with the Madagascar’s Directorate General for Taxation, to test whether simple text message reminders via mobile phones could increase compliance among late-tax filers.

We took a group of 15,885 late-income-tax filers and randomly assigned some of them to receive a series of messages reminding them to file a tax declaration and emphasizing various reasons to pay taxes. Late tax filers were told that they could avoid a late penalty by meeting an extended deadline and were given the link to the tax filing website. 

The results of the experiment were significant. In the control group, only 7.2% of late filers filed a tax return by the extended deadline cited in the SMS messages. This increased to 9.8% in the treatment groups who received SMS reminders. This might not sound like much, but for every dollar spent sending text messages, the tax authority collected an additional 329 dollars in revenues, making the intervention highly cost-effective.

In fact, the return on this particular investment was 32,900 percent! Although this increase in revenue is relatively small in absolute terms—around $375,000—it could be automatically integrated into the tax system. It also suggests that messaging may hold a lot of promise for cost-effectively increasing tax receipts even in developing country contexts….(More)”.

The Remarkable Unresponsiveness of College Students to Nudging And What We Can Learn from It


Paper by Philip Oreopoulos and Uros Petronijevic: “We present results from a five-year effort to design promising online and text-message interventions to improve college achievement through several distinct channels. From a sample of nearly 25,000 students across three different campuses, we find some improvement from coaching-based interventions on mental health and study time, but none of the interventions we evaluate significantly influences academic outcomes (even for those students more at risk of dropping out). We interpret the results with our survey data and a model of student effort. Students study about five to eight hours fewer each week than they plan to, though our interventions do not alter this tendency. The coaching interventions make some students realize that more effort is needed to attain good grades but, rather than working harder, they settle by adjusting grade expectations downwards. Our study time impacts are not large enough for translating into significant academic benefits. More comprehensive but expensive programs appear more promising for helping college students outside the classroom….(More)”