Nudging Debtors to Pay Their Debt: Two Randomized Controlled Trials

Felix Holzmeister, Jürgen Huber, Michael Kirchler and Rene Schwaiger (rene.schwaiger@uibk.ac.at)

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: We conducted two large-scale, highly powered randomized controlled trials intended to encourage consumer debt repayments. In Study 1, we implemented five treatments varying the design of envelopes sent to debtors. We did not find any treatment effects on response and repayment rates compared to the control condition. In Study 2, we varied the letters' contents in nine treatments, implementing factorial combinations of social norm and(non-)deterrence nudges, which were either framed emotively or non-emotively. We find that all nudges are ineffective compared to the control condition and even tend to induce backring effects compared to the agency's original letter. The results of this study contrast with the findings of other studies, which indicate that comparable nudges are highly effective. Thus, our results are more consistent with the literature suggesting that the success of nudging interventions is limited to certain conditions.

Keywords: Nudging; randomized controlled trial; debt repayment (search for similar items in EconPapers)
JEL-codes: C93 D91 G51 (search for similar items in EconPapers)
Pages: 57
Date: 2021
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-reg
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Journal Article: Nudging debtors to pay their debt: Two randomized controlled trials (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2021-21

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