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Information Nudges and Self-Control

Author

Listed:
  • Mariotti, Thomas
  • Schweizer, Nikolaus
  • Szech, Nora
  • von Wangenheim, Jonas
Abstract
We study the optimal design of information nudges for present-biased consumers who have to make sequential consumption decisions without exact prior knowledge of their long-term consequences. For arbitrary distributions of risk, there exists a consumer-optimal information nudge that is of cutoff type, recommending consumption or abstinence according to the magnitude of the risk. Under a stronger bias for the present, the target group receiving a credible signal to abstain must be tightened. We compare this nudge with those favored by a health authority or a lobbyist. When some consumers are more strongly present-biased than others, a traffic-light nudge is optimal.

Suggested Citation

  • Mariotti, Thomas & Schweizer, Nikolaus & Szech, Nora & von Wangenheim, Jonas, 2018. "Information Nudges and Self-Control," CEPR Discussion Papers 13299, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13299
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    Cited by:

    1. Robertson, Matthew J., 2018. "Wrongful Conviction, Persuasion and Loss Aversion," CRETA Online Discussion Paper Series 48, Centre for Research in Economic Theory and its Applications CRETA.
    2. Habibi, Amir, 2020. "Motivation and information design," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 1-18.
    3. von Wangenheim, Jonas, 2018. "Persuasion Against Self-Control Problems," Rationality and Competition Discussion Paper Series 98, CRC TRR 190 Rationality and Competition.

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    More about this item

    Keywords

    Information design; Information nudges; Present-biased preferences; Self-control;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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