Nudges and Impatience: Evidence from a Large Scale Experiment

32 Pages Posted: 30 Sep 2011

See all articles by Eline van der Heijden

Eline van der Heijden

Tilburg University, CentER

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research; Tilburg University - Center for Economic Research (CentER); IZA Institute of Labor Economics; Netspar; Tilburg Law and Economics Center (TILEC)

Wieland Müller

University of Vienna, Department of Economics & VCEE; Tilburg University, Department of Economics & CentER

Johannes (Jan) J. M. Potters

Tilburg University - CentER

Date Written: September 28, 2011

Abstract

We elicit time preferences of a representative sample of 1,102 Dutch individuals and also confront them with a series of incentivized investment decisions. There are two treatments which differ by the frequency at which individuals decide about the invested amount. The low frequency treatment provides a nudge by stimulating decision makers to frame a sequence of risky decisions broadly rather than narrowly. We find that impatient individuals are more "nudgeable" than patient ones as the effect of the treatment on investment levels is significantly larger within the group of high discounters than within the group of low discounters. This result is robust to controlling for various economic and demographic variables and cognitive ability. This finding is interesting from a policy perspective because impatient individuals are often the target group of nudges as impatience is associated with problematic behaviors such as low savings, little equity holdings, low investments in human capital, and an unhealthy lifestyle.

Keywords: narrow framing, time preferences, field experiment

JEL Classification: C93, D03, D81

Suggested Citation

van der Heijden, Eline and Klein, Tobias J. and Müller, Wieland and Potters, Johannes (Jan) J. M., Nudges and Impatience: Evidence from a Large Scale Experiment (September 28, 2011). Netspar Discussion Paper No. 09/2011-081. Available at SSRN: https://ssrn.com/abstract=1935863 or http://dx.doi.org/10.2139/ssrn.1935863

Eline Van der Heijden

Tilburg University, CentER ( email )

P.O. Box 90153
Department of Economics
5000 LE Tilburg
Netherlands

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands

HOME PAGE: http://center.uvt.nl/staff/klein/index.html

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Wieland Müller

University of Vienna, Department of Economics & VCEE ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

HOME PAGE: http://https://homepage.univie.ac.at/wieland.mueller/

Tilburg University, Department of Economics & CentER ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/w.mueller-3.htm

Johannes (Jan) J. M. Potters (Contact Author)

Tilburg University - CentER ( email )

Department of Economics
P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 8204 (Phone)
+31 13 466 3042 (Fax)

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