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on Nudge and Boosting |
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Issue of 2025–09–15
three papers chosen by Marco Novarese, Università degli Studi del Piemonte Orientale |
| By: | Dong, Sarah (Australian National University); Satyadini, Agung (Australian National University); Sinning, Mathias (Australian National University) |
| Abstract: | Both theory and evidence suggest an ambiguous relationship between business tax compliance and geographic proximity to tax offices. We study this issue using a large-scale natural field experiment with Indonesia’s tax authority involving 12, 000 micro, small, and medium enterprises (MSMEs). Businesses were randomly assigned to receive deterrence, information, or public goods letters, or no message. All letters improved compliance, with deterrence messages producing the largest gains - substantially increasing filing rates and raising monthly tax payments. Each dollar spent on deterrence letters generated about US$30 in additional revenue over the course of a year. We observe high compliance among non-treated MSMEs near metropolitan tax offices and find that enforcement messages successfully raise compliance in non-metropolitan regions to comparable levels. However, targeting already compliant MSMEs near metropolitan tax offices backfires, underscoring the need for geographically tailored tax administration strategies. These results provide novel experimental evidence on the relation between geographic proximity and the effectiveness of tax enforcement, helping to reconcile mixed findings in the tax compliance literature. |
| Keywords: | behavioral insights, natural field experiment, tax compliance |
| JEL: | C93 D90 H25 H26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18108 |
| By: | Kragt, Marit Ellen; Sarmiento, Jon Marx; Rola-Rubzen, Maria Fay |
| Abstract: | This review synthesises applications of behavioural science approaches to farmer decision making and risk management. First, we identify key behavioural science concepts that have been found to influence the ways in which people make decisions, with illustration from the agricultural sector. These concepts include dispositional factors (e.g. risk preferences, loss and ambiguity aversion, time discounting), social factors (e.g. social norms), and cognitive factors (e.g. biases, heuristics, framing effects). Knowing how these various concepts influence attitudes towards risk helps to (a) better understand why people make decisions the way they do, and (b) design more effective risk management strategies and decision support tools. We present four behavioural science frameworks that can be used as a reference when designing behavioural interventions: the MINDSPACE framework, the EAST framework, the Behavioural Change Wheel model, and the Theory of Planned Behaviour. Key messages from these frameworks are the importance of making the desired option easy, social norms and the influence of peers, making information salient to the individual, and the role that emotions play in our decision process. The RiskWi$e project offers a unique opportunity to apply behavioural science knowledge in research design and extension to help agricultural risk management. |
| Keywords: | Institutional and Behavioral Economics, Risk and Uncertainty |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uwauwp:369057 |
| By: | Adrienne W. Sudbury (College of Business and Economics, Longwood University, VA 23909); Christian A. Vossler (Department of Economics, University of Tennessee); Daniel Rondeau (University of Victoria) |
| Abstract: | This study uses a laboratory experiment to study key aspects of dynamic fundraising campaigns that utilize goals that must be met for a good or service to be provided. We compare campaigns characterized by a final goal only, an intermediate goal and a known final goal, and a third setting where the final goal is unknown at the beginning of the campaign. The design further varies whether an individual’s payoff from reaching a goal is uncertain or certain, which is intended to capture the effects of providing vague or precise information on the good or service to be provided. We find that adding an intermediate goal decreases both the likelihood of reaching the final goal and the amount of money raised. Even for successful campaigns, introducing an intermediate goal slows the timing of contributions and alters contribution strategies. For the one-goal case, value uncertainty decreases the likelihood the goal is reached. |
| Keywords: | fundraising; choice architecture; provision points; goal setting; stretch goals; uncertainty; lab experiment |
| JEL: | H41 H42 C72 C92 D80 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ten:wpaper:2025-04 |