A Review of Nudges: Definitions, Justifications, Effectiveness

Forthcoming in Journal of Economic Surveys

33 Pages Posted: 30 Nov 2020 Last revised: 21 Jun 2021

See all articles by Luca Congiu

Luca Congiu

Tor Vergata University of Rome; University of Insubria - Department of Economics

Ivan Moscati

University of Insubria - Department of Economics; Bocconi University - Baffi Carefin Centre; London School of Economics & Political Science (LSE) - Centre for Philosophy of Natural and Social Science (CPNSS)

Date Written: June 16, 2021

Abstract

In 2008, the behavioral economist Richard Thaler and the legal scholar Cass Sunstein published a book in which they advocated a novel approach to public policy based on the notion of a ‘nudge’. Roughly speaking, a nudge is an intervention in the decisional context that steers people’s decisions by acting on their cognitive biases. The notion of a nudge generated an intense debate across different disciplines and proved popular with many policy makers around the world. The present paper reviews the debate and research on nudges by focusing on three main dimensions: (1) the exact definition of nudges; (2) the justification of nudge policies, with a focus on ‘libertarian paternalism’; and (3) the effectiveness of nudges, both over time and in comparison with standard policies.

Keywords: Nudge, Behavioral welfare economics, Bounded rationality, Libertarian paternalism, Boosts

JEL Classification: D01, D04, D90, G40, M31

Suggested Citation

Congiu, Luca and Moscati, Ivan, A Review of Nudges: Definitions, Justifications, Effectiveness (June 16, 2021). Forthcoming in Journal of Economic Surveys, Available at SSRN: https://ssrn.com/abstract=3728512 or http://dx.doi.org/10.2139/ssrn.3728512

Luca Congiu (Contact Author)

Tor Vergata University of Rome ( email )

Via columbia 2
Rome, Rome 00123
Italy

University of Insubria - Department of Economics ( email )

Via Monte Generoso 71
Varese, 21100
Italy

Ivan Moscati

University of Insubria - Department of Economics ( email )

Via Monte Generoso 71
Varese, 21100
Italy

Bocconi University - Baffi Carefin Centre ( email )

Via Roentgen 1
Milan
Italy

London School of Economics & Political Science (LSE) - Centre for Philosophy of Natural and Social Science (CPNSS) ( email )

London
United Kingdom

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