Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/110815 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5327
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
A nudge is a non-coercive paternalistic intervention that attempts to improve choices by manipulating the framing of a decision problem. As any paternalism, it faces the difficulty of determining the appropriate welfare criterion. We propose a welfare-theoretic foundation for nudging similar in spirit to the classic revealed preference approach, by investigating a model where preferences and mistakes of an agent have to be elicited from her choices under different frames. We provide characterizations of the classes of behavioral models for which nudging is possible or impossible. For the case where nudging is possible in principle, we derive results on the required quantity of information.
Subjects: 
nudge
framing
behavioral welfare economics
JEL: 
D03
D04
D60
D82
Document Type: 
Working Paper
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