Informational Requirements of Nudging
University of Zurich, Department of Economics, Working Paper No. 190
62 Pages Posted: 24 Apr 2015 Last revised: 29 Sep 2016
Date Written: August 2016
A nudge is a paternalistic government intervention that attempts to improve choices by changing the framing of a decision problem. We propose a welfare- theoretic foundation for nudging similar in spirit to the classical revealed preference approach, by investigating a model where preferences and mistakes of an agent can be elicited from her choices under different frames. We provide characterizations of the classes of behavioral models for which nudging is possible or impossible, and we derive results on the required quantity of information. We also study an extended application to a savings problem.
Keywords: Nudge, framing, behavioral welfare economics, revealed preference
JEL Classification: D03, D04, D60, D82
Suggested Citation: Suggested Citation