Informational Requirements of Nudging

30 Pages Posted: 7 May 2015

See all articles by Jean-Michel Benkert

Jean-Michel Benkert

University of Zurich - Department of Economics

Nick Netzer

University of Zurich

Multiple version iconThere are 2 versions of this paper

Date Written: April 30, 2015

Abstract

A nudge is a non-coercive paternalistic intervention that attempts to improve choices by manipulating the framing of a decision problem. As any paternalism, it faces the difficulty of determining the appropriate welfare criterion. We propose a welfare-theoretic foundation for nudging similar in spirit to the classic revealed preference approach, by investigating a model where preferences and mistakes of an agent have to be elicited from her choices under different frames. We provide characterizations of the classes of behavioral models for which nudging is possible or impossible. For the case where nudging is possible in principle, we derive results on the required quantity of information.

Keywords: nudge, framing, behavioral welfare economics

JEL Classification: D030, D040, D600, D820

Suggested Citation

Benkert, Jean-Michel and Netzer, Nick, Informational Requirements of Nudging (April 30, 2015). CESifo Working Paper Series No. 5327. Available at SSRN: https://ssrn.com/abstract=2603562

Jean-Michel Benkert

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Nick Netzer (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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