When Nudges Fail to Scale: Field Experimental Evidence from Goal Setting on Mobile Phones

65 Pages Posted: 17 Sep 2020

See all articles by Andreas Löschel

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Matthias Rodemeier

University of Münster; University of Chicago - Becker Friedman Institute for Economics

Madeline Werthschulte

affiliation not provided to SSRN

Date Written: 2020

Abstract

Non-pecuniary incentives motivated by insights from psychology (“nudges”) have been shown to be effective tools to change behavior in a variety of fields. An often unanswered question relevant for public policy is whether these promising interventions can be scaled up. In cooperation with a large public utility in Germany, we develop an energy savings application for mobile phones that can be used by the majority of the population. The app randomizes a goal-setting nudge prompting users to set themselves energy consumption targets. The roll-out of the app is promoted by a mass-marketing campaign and large financial incentives. Results document low demand for the energy app in the general population and a tightly estimated null effect of the nudge on electricity consumption among app users. A likely mechanism of the null effect is unfavorable self-selection into the app: users are characterized by an already low baseline energy consumption and exhibit none of the behavioral biases that typically explain why goal setting affects behavior. We also find that the nudge significantly decreases the likelihood to use the app over time. Structural estimates imply that the average user is willing to pay 7.41 EUR to avoid the nudge and the intervention would yield substantial welfare losses if implemented nationwide.

Keywords: Nudging, goal setting, scalability, field experiments, energy, behavioral welfare economics, mobile phones

JEL Classification: C93, D91, Q49

Suggested Citation

Löschel, Andreas and Rodemeier, Matthias and Werthschulte, Madeline, When Nudges Fail to Scale: Field Experimental Evidence from Goal Setting on Mobile Phones (2020). ZEW - Centre for European Economic Research Discussion Paper No. 20-039, Available at SSRN: https://ssrn.com/abstract=3693673 or http://dx.doi.org/10.2139/ssrn.3693673

Andreas Löschel (Contact Author)

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Matthias Rodemeier

University of Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

University of Chicago - Becker Friedman Institute for Economics ( email )

Chicago, IL 60637
United States

Madeline Werthschulte

affiliation not provided to SSRN

No Address Available

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