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Toward an Understanding of the Welfare Effects of Nudges: Evidence from a Field Experiment in the Workplace

Year: 2020

Type: article

Abstract: Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compared output levels across 1,000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labour. The estimated welfare costs of using the loss contract are quite modest—perhaps because the loss contract is viewed as a (soft) commitment device.

Source: The Economic Journal

DOI: 10.1093/ej/ueaa054

Authors: Erwin Bulte, John A List, Daan van Soest

Institutions: Wageningen University & Research, University of Chicago, Tilburg University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, No poverty

Open Access status: hybrid

Estimated APC paid: $4,463