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

Mette Trier Damgaard and Christina Gravert

Journal of Public Economics, 2018, vol. 157, issue C, 15-26

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.

Keywords: Avoiding-the-ask; Charitable giving; Field experiment; Inattention; Nudge; Reminders (search for similar items in EconPapers)
JEL-codes: C93 D03 D64 H41 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: The hidden costs of nudging: Experimental evidence from reminders in fundraising (2016) Downloads
Working Paper: The hidden costs of nudging: Experimental evidence from reminders in fundraising (2016) Downloads
Working Paper: The hidden costs of nudging: Experimental evidence from reminders in fundraising (2016) Downloads
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