Abstract

Behavioural interventions that directly influence decision-making are increasingly popular policy tools. Two prominent interventions used are nudges, which promote an optimal choice without restricting options, and boosts, which promote individual capabilities to make more informed choices. In this study, we compare the effectiveness of nudges and boosts for financial decisions under uncertainty and delineate the factors that may improve their effectiveness. Using a US sample we tested a series of choices under uncertainty. Findings indicate effects of nudges and boosts generally differ depending on loss and gain framing, and boosts are typically more effective for those who initially made suboptimal choices. These insights provide clarity to highly nuanced, complex patterns across population behaviours in the context of financial choice under uncertainty and considerable implications for the design of interventions for policies that impact population behaviours.

This research was undertaken by members of the Policy Research Group – Tomas Folke, Kai Ruggeri and Matija Franklin.

Matija Franklin is a Behavioural Scientist at the Policy Research Group and NudgeTech. With the PRG , he is currently researching ways in which nudges and boosts can be used to improve financial decision-making under uncertainty. With NudgeTech he is creating a smart scheduler that uses behavioural insights and machine learning to schedule people’s work days.