Information Nudges and Self-Control

64 Pages Posted: 21 Feb 2019

See all articles by Thomas Mariotti

Thomas Mariotti

University of Toulouse I

Nikolaus Schweizer

Tilburg School of Economics and Management

Nora Szech

Karlsruhe Institute of Technology

Jonas von Wangenheim

Free University of Berlin (FUB); University of Bonn - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: 2018

Abstract

We study the optimal design of information nudges for present-biased consumers who make sequential consumption decisions without exact prior knowledge of their long-term consequences. For any distribution of risks, there exists a consumer-optimal information nudge that is of cutoff type, recommending abstinence if the risk is high enough. Depending on the distribution of risks, more or less consumers have to be sacrificed, as they cannot be credibly warned even though they would like to be. Under a stronger bias for the present, the target group receiving a credible warning to abstain must be tightened, but this need not increase the probability of harmful consumption. If some consumers are more strongly present-biased than others, traffic-light nudges turn out to be optimal and, when subgroups of consumers differ sufficiently, the optimal traffic-light nudge is also subgroup-optimal. We finally compare the consumer-optimal nudge with those a health authority or a lobbyist would favor.

Keywords: information design, information nudges, present-biased preferences, self-control

JEL Classification: C730, D820

Suggested Citation

Mariotti, Thomas and Schweizer, Nikolaus and Szech, Nora and von Wangenheim, Jonas and von Wangenheim, Jonas, Information Nudges and Self-Control (2018). CESifo Working Paper No. 7346, Available at SSRN: https://ssrn.com/abstract=3338673 or http://dx.doi.org/10.2139/ssrn.3338673

Thomas Mariotti (Contact Author)

University of Toulouse I ( email )

Toulouse, 31000
France

Nikolaus Schweizer

Tilburg School of Economics and Management ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands

Nora Szech

Karlsruhe Institute of Technology ( email )

Kaiserstra├če 12
Karlsruhe, Baden W├╝rttemberg 76131
Germany

Jonas Von Wangenheim

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

University of Bonn - Department of Economics ( email )

Bonn
Germany

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