When a Nudge Backfires: Combining (Im)Plausible Deniability with Social and Economic Incentives to Promote Pro-Social Behavioral Change

63 Pages Posted: 26 Dec 2018 Last revised: 27 Mar 2020

See all articles by Gary Bolton

Gary Bolton

University of Texas at Dallas - Naveen Jindal School of Management

Eugen Dimant

University of Pennsylvania; CESifo

Ulrich Schmidt

University of Kiel - Institute of Economics

Date Written: March 26, 2020

Abstract

Both theory and recent empirical evidence on nudging suggest that observability of behavior acts as an instrument for promoting (discouraging) pro-social (anti-social) behavior. We connect three streams of literature (nudging, social preferences, and social norms) to investigate the universality of these claims. By employing a series of high-powered laboratory and online studies, we investigate when and in what form such a nudge can backfire (not only be ineffective but actually worsen the outcome), the mechanism behind the backfiring, and how to mitigate it. For one, we find that inequality aversion moderates the effectiveness of such nudges. For another, we successfully explore the mechanism of increasing the salience of norms as means to counteract the backfiring of the tested nudge. From a policy point of view, our results raise awareness of the pitfalls of simple behavioral interventions.

Keywords: Anti-Social Behavior, Nudge, Pro-Social Behavior, Reputation, Social Norms

JEL Classification: C91, D64, D9

Suggested Citation

Bolton, Gary and Dimant, Eugen and Schmidt, Ulrich, When a Nudge Backfires: Combining (Im)Plausible Deniability with Social and Economic Incentives to Promote Pro-Social Behavioral Change (March 26, 2020). Available at SSRN: https://ssrn.com/abstract=3294375 or http://dx.doi.org/10.2139/ssrn.3294375

Gary Bolton

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Eugen Dimant (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://sites.google.com/view/eugendimant/

CESifo ( email )

Poschinger Str. 5
Munich
Germany

Ulrich Schmidt

University of Kiel - Institute of Economics ( email )

Olshausenstrasse 40
24098 Kiel, 24098
Germany

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