Indranil Goswami

When Should the Ask Be a Nudge? The Effect of Default Amounts on Charitable Donations

How does setting a donation option as the default in a charitable appeal affect peoples decisions? In eight studies, comprising 11,508 participants making 2,423 donation decisions in both experimental settings and a large-scale natural field experiment, the authors investigate the effect of “choice-option” defaults on the donation rate, average donation amount, and the resulting revenue. They find (1) a “scale-back” effect, in which low defaults reduce average donation amounts; (2) a “lower-bar” effect, in which defaulting a low amount increases donation rate; and (3) a “default-distraction” effect, in which introducing any defaults reduces the effect of other cues, such as positive charity information. Contrary to the view that setting defaults will backfire, defaults increased revenue in the field study. However, the findings suggest that defaults can sometimes be a “self-canceling” intervention, with countervailing effects of default option magnitude on decisions and resulting in no net effect on revenue. The authors discuss the implications of the findings for research on fundraising specifically, for choice architecture and behavioral interventions more generally, and for the use of “nudges” in policy decisions.

A Bayesian Hierarchical Model for Inferring Player Strategy Types in a Number Guessing Game

The p-beauty contest is a multi-player number guessing game that is widely used to study strategic behavior. Using new data from a speciallydesigned web experiment, we examine the evidence in favor of a popular class of behavioral economic models called k-step thinking models. After fitting a custom Bayesian spline model to the experimental data, we estimate that the proportion of players who could be using a k-step thinking strategy is approximately 25%.

The Dynamic Effect of Incentives on Post-Reward Task Engagement

Although incentives can be a powerful motivator of behavior when they are available, an influential body of research has suggested that rewards can persistently reduce engagement after they end. This research has resulted in widespread skepticism among practitioners and academics alike about using incentives to motivate behavior change. However, recent field studies looking at the longer-term effects of temporary incentives have not found such detrimental behavior. We design an experimental framework to study dynamic behavior under temporary rewards, and find that although there is a robust decrease in engagement immediately after the incentive ends, engagement returns to a post-reward baseline that is equal to or exceeds the initial baseline. As a result, the net effect of temporary incentives on behavior is strongly positive. The decrease in post-reward engagement is not on account of a reduction in intrinsic motivation, but is instead driven by a desire to take a ‘break’, consistent with maintaining a balance between goals with primarily immediate and primarily delayed benefits. Further supporting this interpretation, the initial decrease in post-reward engagement is reduced by contextual factors (such as less task difficulty and higher magnitude incentives) that reduce the imbalance between effort and leisure. These findings are contrary to the predictions of major established accounts and have important implications for designing effective incentive policies to motivate behavior change.

More Time, More Work: How Time Limits Bias Estimates of Project Duration and Scope

We propose that time limits systematically bias predictions of workers’ completion times, even when the limits are uninformative and cannot affect worker’s behavior. We show evidence for this bias in controlled laboratory studies and in a field survey. We find that longer time limits contribute to a misperception that the task involves more work, even for experienced managers making estimates in a familiar setting. This scope and duration bias has important behavioral implications, including an excessive preference for flat fee compensation contracts over contracts based on time spent working.

The 'Mere-Reminder' Effect of Salient Calorie Labeling

Calorie labeling, an increasingly common policy intervention, has had mixed effects on consumer food choices. We show that visual salience of the calorie labels, rather than merely information content or format, is the key to reducing calorie. Our findings indicate that effective labeling, more visually salient than standard industry disclosures, works primarily as a reminder, by prompting people to consider nutrition rather than by providing new information. Both visually salient information and completely non-informative “mere reminders” to consider calories have similar effects on calorie choices, by making people more likely to incorporate their beliefs about nutrition into their decision. As a consequence, when consumers perceive high-calorie items as healthy, calorie labeling working as mere reminders will be less effective and can even backfire, leading to more choices of healthy-seeming high-calorie food options. The findings underscore the need for experimentally testing the psychological consequences of even ostensibly informational interventions.

The Nature and Extent of Post-Reward Crowding-Out: The ‘Effort-Balancing’ Account

Although incentives can be a powerful motivator of behavior, research on intrinsic motivation has suggested that rewards can crowd-out task interest, reducing engagement when rewards end. This research has resulted in widespread skepticism among practitioners and academics alike about using incentives in interventions. However, recent field studies examining the long-term effects of temporary incentives have not found such effects. We propose a new Effort-Balancing account, which suggests that post-reward crowding-out often represents the need for a ‘break’ after investing effort, rather than a change in interpretation of the task or beliefs about own preferences. As a result, post-reward crowding-out is relatively momentary and consistent with longer-term neutral or positive spillover effects of temporary incentives. We test a series of novel predictions, including that momentary crowding-out will be reduced when efforts are more balanced by rewards (e.g., higher reward magnitude or a less effortful activity) or when people are given a break. The implications of momentary crowding-out for long-term behavior and design of incentive programs are discussed.