No Evidence That Distracted People are Easier to Nudge. An Experiment on the Interaction of Cognitive Scarcity and Defaults in a Public Goods Game

Abstract

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 personal costs. Because the question of responsibility to contribute to public goods on an individual level is a tricky one, it is important to investigate whether vulnerable people are more susceptible to the influence of this type of nudges. We report evidence from a laboratory public goods experiment testing whether the effects of pro-individual, resp. pro-social defaults on behavior vary based on cognitive resource availability. Findings based on 476 independent observations do not show an interaction effect. Our findings inform public policy-making by shedding light on heterogeneous impacts of behavioral policies imposing individual costs to foster social benefits. This is important for the discussion on who should contribute to public good provision and how nudges may affect this. Thus, findings add to the debate on the ethics of nudges, as well as to the scientific understanding of the various nuances of libertarian paternalistic policies.

Keywords: cognitive resources, defaults, experiment, nudge, public good

JEL Classification: D01, D04, D91, H41, Q58