Tainted Nudge

Abstract

Nudges are increasingly used by governments and organizations to promote behaviors like healthy eating or effective financial planning. Due to their cost-effectiveness, such nudges may earn a profit for the nudger. We investigate whether this profit taints nudges, as suggested by recent research showing that altruistic acts can be regarded less favourably if they result in private benefits to the actor. Across seven preregistered experiments, we demonstrate that prosocial nudges are indeed rated less positively if a profit is earned. But this tainting is limited: prosocial but profitable nudges are evaluated much more favourably than merely profitable ones, unless profit-motivated nudgers deceptively claim their motive is prosocial. Our findings apply to both for-profit and non-profit organizations and provide behaviorally informed guidelines for the introduction of nudge interventions. We suggest organizations can avoid the potential risk of backlash by openly disclosing the win-win nature of their prosocial nudges.

Keywords: nudges, win-win initiatives, profit, prosocial actions, deception

JEL Classification: D64, C90