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on Nudge and Boosting |
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Issue of 2024–12–30
two papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Paul M. Lohmann (University of Cambridge); Elisabeth Gsottbauer (Free University of Bozen-Bolzano); Christina Gravert (Department of Economics, University of Copenhagen); Lucia A. Reisch (Judge Business School, University of Cambridge,) |
| Abstract: | This paper explores the relationship between decision-making speed and the effectiveness of two nudges – carbon footprint labelling and menu repositioning – aimed at encouraging climate-friendly food choices. Building on Kahneman’s dual-process theory of decision-making, we examine whether these interventions are more effective in fast, intuitive (System 1) contexts compared to reflective, deliberate (System 2) ones. Using an incentivized online randomized controlled trial with a quasirepresentative sample of British consumers (N=3, 052) ordering meals through an experimental food-delivery platform, we introduced a time-pressure mechanism to capture both fast and slow decision-making processes. Our findings suggest that menu repositioning is an effective tool for promoting climate-friendly choices when decisions are made quickly, though the effect fades with extended deliberation. Carbon labels, in contrast, showed minimal impact overall but reduced emissions among highly educated, climate-conscious individuals under time pressure. The results imply that choice architects should apply both interventions in contexts where consumers make rapid decisions, such as digital platforms, to help mitigate climate externalities. |
| Keywords: | carbon-footprint labelling, choice architecture, food-delivery apps, low-carbon diets, dual-process models, system 1 |
| JEL: | C90 D04 I18 D90 Q18 Q50 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2419 |
| By: | James Alm (Tulane University); Jay A. Soled (Rutgers University); Kathleen DeLaney Thomas (University of North Carolina School of Law) |
| Abstract: | While attaining perfect tax compliance is unachievable, more can and must be done. In the past, the country has relied primarily on a traditional system of sticks (e.g., audits and penalties) and carrots (e.g., refunds and whistleblower awards) to help narrow the âtax gap, â or the difference between what taxpayers owe in taxes and what they actually pay. Now, in the social media era, Congress and the Internal Revenue Service (IRS) should look beyond these traditional enforcement mechanisms. To achieve an even higher voluntary compliance rate, this article advocates for policymakers to invest greater resources to enhance the social norm related to tax compliance. While scholars have long suggested that social norms play a role in tax compliance, this article suggests a revolutionary approach, one that attempts to foster a social norm of compliance by employing the use of social media influencers. The internet and other electronic media have revolutionized and amplified the stunning impact that influencers can have. Virtually everyone, particularly the younger generation, is keenly aware of the dramatic impact that influencers can have in shaping social norms. Now is thus the time for Congress and the IRS to capitalize on this power by strategically employing social media influencers. A well-crafted influencer campaign could educate taxpayers on how to fulfill their tax obligations, remind taxpayers of the laudatory impact of the tax system, and foster a positive social norm of compliance. Such a change in compliance orientation could help policymakers narrow the tax gap, yielding billions of dollars of additional tax revenue without the need to raise tax rates. |
| Keywords: | Tax compliance, tax gap, social norms, social media, influencers, nudges |
| JEL: | H2 H26 D91 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:tul:wpaper:2413 |