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Passive behavior is ubiquitous - even when facing various alternatives to choose from, people commonly fail to take decisions. This paper provides evidence on the cognitive foundations of such "passive choices" and studies implications for policies that encourage active decision-making. In an...
Persistent link: https://www.econbiz.de/10012006101
Passive behavior is ubiquitous - even when facing various alternatives to choose from, people commonly fail to take decisions. This paper provides evidence on the cognitive foundations of such "passive choices" and studies implications for policies that encourage active decision-making. In an...
Persistent link: https://www.econbiz.de/10012870144
We study the effects of two widely observed behavioral policy interventions⸻the simplification of complex decisions and the implementation of high-quality defaults. Based on a laboratory experiment featuring a dual-task paradigm, we demonstrate that these policies do not only improve decisions...
Persistent link: https://www.econbiz.de/10014517962
Pigou (1920) advocated for taxes, set equal to marginal damages, on goods produced and consumed that involve negative externalities. Samuelson (1954) laid out the conditions for optimal pure public goods provision, but noted that free-riding (the “demand revelation” problem) was likely to...
Persistent link: https://www.econbiz.de/10012962737
Economists typically locate the origins of the theory of externalities in A.C. Pigou's The Economics of Welfare (1920, 1932), where Pigou suggested that activities which generate uncompensated benefits or costs—e.g., pollution, lighthouses, scientific research—represent instances of market...
Persistent link: https://www.econbiz.de/10012913800
In an era where behavioral insights overwhelmingly shape policy interventions, heuristic-based decision-making merits closer consideration. That policy environments are complex is not a new topic, nor is the insight that simple heuristic solutions might work best in some complex situations. I...
Persistent link: https://www.econbiz.de/10012921382
Nudges are popular instruments in the toolbox of policymakers. Yet, empirical evidence suggests some of these interventions can influence decisions which were not initially targeted, raising the risk to undermine their effectiveness. To analyse such spillover effects, I develop micro-foundations...
Persistent link: https://www.econbiz.de/10013246178
Policymakers discuss nudges as instruments to foster individual public good contributions. Contrary to the original aim of nudges, which is to improve decision outcomes for the individual, pro-social nudges aim to improve the social outcomes of individual behavior. This can potentially result in...
Persistent link: https://www.econbiz.de/10012866981
Policy makers increasingly use choice defaults to promote `good' causes by influencing socially relevant decisions in desirable ways, e.g., to increase pro-environmental choices or pro-social behavior in general. Such default nudges are remarkably successful when judged by their effects on the...
Persistent link: https://www.econbiz.de/10012902082
Strong growth in disposable income has inflated consumption to unprecedented, but not sustainable levels. In this process consumer behavior has been changing. To explain the driving forces of this development, the paper introduces a theory of evolving consumer preferences that is molded in an...
Persistent link: https://www.econbiz.de/10010286752