Everyone Believes in Redemption: Nudges and Overoptimism in Costly Task Completion

Robert Letzler


Joshua Tasoff

Claremont Colleges - Claremont Graduate University

February 19, 2013

We elicit subjects' beliefs about the likelihood that they will redeem a mail-in form. Expected redemption rates exceed actual redemption rates by 49 percentage points, meaning that subjects are overoptimistic about their likelihood of redemption. We test the impact of three "nudges" on overoptimism: (1) informing subjects about a previous cohort's redemption rates, (2) reminding subjects about the redemption deadline, and (3) reducing transaction costs. Only the third nudge had any effect and it reduced overoptimism by one half. The third nudge increased redemption but had no effect on beliefs suggesting that weak cost-salience is the mechanism for overoptimism.

Number of Pages in PDF File: 47

Keywords: rebates, overoptimism, overconfidence, nudges, cost salience, prospective memory, present bias

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Date posted: May 27, 2012 ; Last revised: February 20, 2013

Suggested Citation

Letzler, Robert and Tasoff, Joshua, Everyone Believes in Redemption: Nudges and Overoptimism in Costly Task Completion (February 19, 2013). Available at SSRN: http://ssrn.com/abstract=2066930 or http://dx.doi.org/10.2139/ssrn.2066930

Contact Information

Robert Letzler
Independent ( email )
No Address Available
Joshua Tasoff (Contact Author)
Claremont Colleges - Claremont Graduate University ( email )
150 E. Tenth Street
Claremont, CA 91711
United States
HOME PAGE: http://sites.cgu.edu/tasoffj/
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