Nudging Debtors to Pay Their Debt: Two Randomized Controlled Trials

Arbeitspapier

We conducted two large-scale, highly powered randomized controlled trials intended to encourage consumer debt repayments. In Study 1, we implemented five treatments varying the design of envelopes sent to debtors. We did not find any treatment effects on response and repayment rates compared to the control condition. In Study 2, we varied the letters' contents in nine treatments, implementing factorial combinations of social norm and (non-)deterrence nudges, which were either framed emotively or non-emotively. We find that all nudges are ineffective compared to the control condition and even tend to induce backfiring effects compared to the agency's original letter. Since comparable nudges have been shown to be highly effective in other studies, our study supports the literature, emphasizing that the success of nudging interventions crucially depends on the domain of application.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2021-21

Classification and Topics

• Classification: Wirtschaft ; Field Experiments ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
• Subject: Nudging ; randomized controlled trial ; debt repayment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Holzmeister, Felix ; Huber, Jürgen ; Kirchler, Michael ; Schwaiger, Rene
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/240449
• Last update: 10.03.2025, 11:44 AM CET