The welfare effects of behavioral interventions

Nudges and, more generally, behavioral interventions have become increasingly popular among policy makers. They are used in many contexts, in particular when policy makers do not have a budget or the legal framework to implement direct financial incentives. However, little is known about the welfare properties of these interventions. For instance, many of the interventions manage to change behaviors, such as energy or water consumption, that are known to have low price elasticities.

Why is it that behavioral interventions are so effective? Are they so effective because they help individuals overcome biases in decision making? Or do they just impose an inordinate psychological tax? What are the underlying behavioral mechanisms that make interventions effective? How does their welfare impact compare to traditional policy instruments, such as taxes or subsidies?

These questions need to be addressed with a combination of theory and clever empirical setups that allow one to identify the key parameters of the theory. They are relevant in many settings, such as resource consumption, blood donations, or charitable giving.

The aim of this research topic is to contribute to a better understanding of behavioral interventions and nudges as policy tools. We welcome submissions using experimental or observational data. In particular, we encourage submissions that use designs that allow structural identification of key welfare parameters.

Keywords: behavioral interventions, welfare, policy

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