When a Nudge Is (Not) Enough: Experiments on Social Information and Incentives

Abstract Financial incentives and information nudges are two of the most widely used behaviour change interventions. However, we do not yet fully understand how incentives and social information interact. We report two experiments examining how incentives and social information interact to induce behavior change. In the first experiment, the behavior of interest is punctuality in the field; in the second, we examine cooperation in a large-N prisoners’ dilemma in the lab. In both experiments participants valued good behavior and believed others also valued it, yet only a minority behaved well. We find that incentives work in both environments, while information nudges were only effective in the prisoners’ dilemma. Incentives complement information nudges only in the prisoners’ dilemma. Our experimental design also allows us to distinguish between intrinsically motivated and unmotivated subjects: the former respond to treatment manipulations very differently to the latter, both behaviourally and in their beliefs about others’ behavior.