Evaluating Deliberative Competence: A Simple Method with an Application to Financial Choice

111 Pages Posted: 16 Mar 2021

See all articles by Sandro Ambuehl

Sandro Ambuehl

University of Zurich - Department of Economics

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Date Written: March 1, 2021

Abstract

We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.

JEL Classification: C91, D04, D14, D60, D91, I21

Suggested Citation

Ambuehl, Sandro and Bernheim, B. Douglas and Lusardi, Annamaria, Evaluating Deliberative Competence: A Simple Method with an Application to Financial Choice (March 1, 2021). CEPR Discussion Paper No. DP15863, Available at SSRN: https://ssrn.com/abstract=3805278

Sandro Ambuehl (Contact Author)

University of Zurich - Department of Economics ( email )

Z├╝rich
Switzerland

HOME PAGE: http://https://sites.google.com/site/sandroambuehl/home

B. Douglas Bernheim

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-8732 (Phone)
650-725-5702 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Annamaria Lusardi

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States

HOME PAGE: http://business.gwu.edu/profiles/annamaria-lusardi/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
117
PlumX Metrics