Nudging and RCTs in Finance : A review of recent literature

This chapter reviews the recent literature on nudges and its applications in the area of finance. We restrict our attention to randomized controlled trials (RCTs) to shed light on the influence of nudges in form of defaults, active choice and simplification; social norms and comparisons; and implementation intentions prompts and reminders on financial decision making. The emphasis of our review on the one hand reflects on changes to the choice architecture and on the other hand on simple and low-cost informational interventions. Our key finding is that the frequency of RCTs in finance is so far low and the results are mixed, thus leaving scope for further research