Elena Kantorowicz-Reznichenko

Can Nudges Be Transparent and Yet Effective

Nudges receive growing attention as an effective concept to alter peoples decisions without significantly changing economic incentives or limiting options. However, being often very subtle and covert, nudges are also criticized as unethical.By not being transparent about the intention to influence individual choice they might be perceived as limiting freedom of autonomous actions and decisions. So far, empirical research on this issue is scarce. In this study, we investigate whether nudges can be made transparent without limiting their effectiveness. For this purpose we conduct a laboratory experiment where we nudge contributions to carbon emission reduction by introducing a default value. We test how different types of transparency (i.e. knowledge of the potential influence of the default, its purpose, or both) influence the effect of the default. Our findings demonstrate that the default increases contributions, and information on the potential influence, its purpose, or both combined do not significantly influence the default effect. Furthermore, we do not find evidence that psychological reactance interacts with the influence of transparency. Findings support the policy-relevant claim that nudges (in the form of defaults) can be transparent and yet effective.

Cognitive Biases and Procedural Rules: Enhancing the Use of Alternative Sanctions

The practice of short-term imprisonment has been long criticised due to its criminogenic effect and costs. To minimise its use, many countries introduced alternative sanctions such as community service or home confinement with electronic monitoring. Unfortunately, in practice those sanctions are often imposed on non-prison bound offenders, a phenomenon termed “the net-widening problem”. Consequently, instead of reducing the prison population, the alternative sanctions substitute lighter punishments such as fine or conditional imprisonment. The discretion power whether to impose a prison sentence or its alternatives lies in the hands of the courts. Therefore, the way to enhance the use of alternative sanctions as a substitute to short-term imprisonment is to change the behaviour of judges. This paper adopts the unique approach of behavioural law and economics in order to discuss procedural rules that have the potential to achieve the above-mentioned goal. Each of the analysed procedural rules explains the cognitive biases, which judges are subject to when choosing between a prison sentence and an alternative punishment. Following that, this paper analyses how the suggested procedural rules overcome or use those biases in order to promote the use of alternative sanctions.

Can Imprisonment Be Cheaper? The Law and Economics of Private Prisons

Custody is the most expensive method of punishment in the western world, as compared to other alternatives. Although expensive, prison is an indispensible instrument to deal with judgment proof or dangerous offenders. Hence, by using the law and economics approach, this paper explores prison privatization as an instrument for less expensive incarceration. This method has the potential to reduce the prison costs without hampering its quality. However, a restructuring of the current contracts is needed to achieve this purpose. The attention given to the topic of private prisons by the law and economics scholars, especially in the European context, is limited and this paper attempts to fill this gap. The present paper applies arguments from the bureaucracy and political science literature to explain the inefficiencies of public prisons. Subsequently, the potential problems of private prisons are presented through the principle-agent model and solutions are offered.

Any-Where Any-Time: Ambiguity and the Perceived Probability of Apprehension

Enforcement is a costly endeavour. Thus, governments ought to be innovative in designing less costly policies, yet, effective in preventing crime. To this end, this paper suggests using insights from behavioural law and economics. Empirical evidence demonstrates that police have an important effect in deterring crime. However, increasing the number of policemen is a costly policy. Therefore, this paper explores policy changes which exploit offender’s ambiguity aversion in order to reduce crime without increasing the police force. Namely, empirical evidence suggests that criminals are better deterred by ambiguous detection. Thus, this paper analyses the ways to randomize the apprehension strategies to meet this end. Furthermore, it provides new evidence, based on a survey, that potential violators are largely not aware of policy changes. Inasmuch as the information regarding the intensified uncertainty is essential to its success, this paper discusses the possibility to increase criminals’ awareness through the ‘availability heuristic’.