Chicago Unbound

Article Title

On the Equilibrium Effects of Nudging

Authors

Ran SpieglerFollow

Start Page

389

Abstract

Consumers’ systematic decision biases make them vulnerable to market exploitation. The doctrine of libertarian paternalism maintains that this problem can be mitigated by soft interventions (nudges) like disclosure or default architecture. However, the case for nudging is often made without an explicit model of the boundedly rational choice procedures that lie behind consumer biases. I demonstrate that once such models are incorporated into the analysis, equilibrium market reaction to nudges can reverse their theoretical consequences.

Recommended Citation

Spiegler, Ran (2015) "On the Equilibrium Effects of Nudging," Journal of Legal Studies: Vol. 44: No. 3, Article 5.
Available at: https://chicagounbound.uchicago.edu/jls/vol44/iss3/5