Criticisms of nudging suggest that nudges infringe on decision makers’ autonomy. Yet, little empirical research has explored whether people who are subjected to nudges agree. In three between-group experiments (N = 2083), we subject participants to contrasting choice architectures and measure experiences of autonomy, choice-satisfaction, perceived threat to freedom of choice, and objection to the choice architecture. Participants who received a prosocial opt-out default nudge made more prosocial choices but did not report lower autonomy or choice satisfaction than participants in opt-in default or active-choice conditions. This was the case even when the presence of the nudge was disclosed, and when monetary choice stakes were introduced. With monetary choice stakes, participants perceived the threat to freedom of choice as slightly higher in the nudge condition than in the other conditions, but objection to the choice architecture did not differ between the conditions. Taken together, our results suggest that default nudges are less manipulative and autonomy-infringing than sometimes feared. We recommend that policymakers include measures of choice experiences when testing out new interventions.

Meat consumption is associated with both public health risks and substantial CO2 emissions. In a large-scale field-experiment, we applied four nudges to the digital menus in 136 hamburger restaurants. The nudges promoted vegetarian food purchases by either (1) changing the menu position of vegetarian food, or aligning vegetarian food with (2) a hedonic, taste-focused nudge, (3) the warm-glow effect, or (4) a descriptive social norm. These nudges were thus aimed to shift salience toward a certain goal or the salience of a specific alternative. Vegetarian food purchases were measured in two datasets analyzing if nudges affected customers' "route " to ordering vegetarian food (29,640 observations), and the total number of vegetarian food sold during the intervention (346,081 observations). Results showed that the position nudge affected customers route to buying vegetarian food. More specifically, making the "green category " more accessible made more customers order through that category. Interestingly, this did not affect the total number of vegetarian sales. However, results indicate that nudges that utilize the salience of goals, in particular hedonic goals, may have an overall positive effect on total vegetarian sales.

Although nudging is increasingly recognized as an important policy tool for encouraging prosocial behaviour, there is little empirical evidence about downstream effects of such interventions. In five experiments, we explore behavioural spillover from the most well-known and used nudge: the default nudge. Analysing the combined dataset of approximately 10,000 participants, we find that participants subjected to a prosocial default at an initial monetary choice behaved more prosocially at a subsequent effortful task compared to participants initially subjected to a proself default. The effect stems from those who resisted the default nudge and compensated their initial proself choice through behaving prosocially afterwards, which is suggestive of a moral cleansing mechanism. While behavioural spillover effects from default nudges appear to be small, they are still potentially consequential due to the scalability of nudge interventions.

Default nudges have been shown to be effective in many situations but the net effect is unclear since subsequent choices sometimes are affected positively and sometimes negatively. Moderators of positive and negative spillovers would explain these varying results and have therefore been investigated in this study. In a two-step, online experiment were 1.200 participants nudged to donate to charity and then given the opportunity to work for charity. Personality traits were investigated between two and four weeks before the spillover experiment. Spillover here constitutes the difference in work for charity between the nudge and control condition for participants that donated the same amount. This study shows that participants that adhered highly to descriptive norms more often made a non-zero donation but worked less (or not at all) for charity when nudged, i.e. negative spillover was shown. Donations and work for charity on the other hand correlated for participants that did not adhere highly to descriptive norms and the nudge affected both the donation and the amount worked for a charity in the intended direction, i.e. positive spillover was shown. Aggregated spillover was slightly positive since the positive spillover outweighs the negative spillover. p { line-height: 115%; margin-bottom: 0.25cm; background: trans

Transparency is a key factor in determining the permissibility of behavior change interventions. Nudges are at times considered manipulative from failing this condition. Ethicists suggest that making nudges transparent by disclosing them to decision makers is a way to mitigate the manipulation objection, but questions remain as to what downstream consequences disclosing decision makers of a nudge may cause. In this registered report, we investigated two such consequences: (1) whether disclosure affects perceptions of the choice architect and (2) whether disclosure influences subsequent behavior. To these ends, we present data from three pilot studies and two main experiments (total N = 2177). In both experiments, we used defaults to nudge participants towards prosocial behaviors with real consequences. Experiment 1 employed a mixed design examining changes in perceptions of the choice architect for participants presented with a nudge disclosure before or after choosing. Experiment 2 extended by investigating the effects of disclosure on the default effect, perceptions of the choice architect, and on a subsequent prosocial choice task. Results showed that (1) when presented before choosing the nudge disclosure did not influence perceptions of the choice architect. However, when presented after, perceptions deteriorated. (2) The disclosure, regardless of when presented, had no effect on participants' behavior in a subsequent non-nudged choice. Additionally, the disclosure did not affect the nudge's influence on the initial choice. We conclude that lack of transparency can hurt choice architects' reputation and discuss under what circumstances this may materialize behaviorally. Materials, data, and code are available at osf.io/463af/.

To avoid concerns of manipulation, nudges should be transparent to the people affected by the intervention. Whether increasing the transparency of a nudge also leads to more favorable perceptions of the nudge is however not certain, and may depend on the circumstances of the evaluation. Across three preregistered experiments (N = 1915), we study how increased transparency affects the perceived fairness of a default nudge, in joint vs. separate, and description- vs. experience-based evaluations. We find that transparency increases perceived fairness of the nudge in a joint comparison, when the relative benefits of transparency are easy to see. However, in a real choice-context, with nothing to compare against, transparency instead decreases perceived fairness. Efforts to make nudges more ethical may thus ironically make choice architects perceived as less ethical. Additionally, we find that the transparent default nudge still successfully affects behavior, that different default-settings communicate different perceived intentions of the choice architect, and that participants consistently favor opt-in defaults over opt-out defaults nudges – regardless of their level of transparency.

Performance-related bonuses are important tools for investment organizations to incentivize stock traders. Yet, two experiments indicate that bonuses rewarding short-term performance may lead to worse timing of purchases. The authors propose that hyperbolic time discounting makes participants set lower aspired purchase prices for short-term (decreasing percentage) bonuses than for long-term (increasing percentage) bonuses. For this reason purchases are made earlier for decreasing than increasing percentage bonuses, earlier for decreasing than random prices, and earlier for high price volatility than for low price volatility. Neither purchases at the lowest price or highest bonus are attained. Hyperbolic time discounting may account for bubbles observed in experimental double-auction markets.

Our aim is to investigate whether bonuses make stock portfolio managers take higher risks by diversifying less. In two experiments with undergraduates role-playing being professional investors, we test a model implying that they initially anchor on 100% allocation to one of two options delivering the largest bonus payout, then adjust towards allocating equally much to each option (maximal diversification) depending on the degree of perceived uncertainty of the bonus outcome. In Experiment 1 we find as expected that when the bonus is reduced, investment in the preferred option decreases such that diversification increases. Diversification is larger when uncertainty of the bonus outcome is made salient. In Experiment 2 we show that a majority herd strengthens the effect of a bonus for investing in a preferred option despite salient uncertainty of the bonus outcome. In actual stock markets such herding effects would result from investors being similarly rewarded by bonuses.

A social-psychological perspective conceives of herding in stock markets as informative social influence resulting from heuristic or systematic information processing. In three laboratory experiments employing undergraduates we apply this perspective to investigate factors that prevent herd influence that would lead to inaccurate predictions of stock prices. In Experiment 1, we show that an economic reward for making the same predictions as the herd increases the influence of a majority but not the influence of a minority, and that an individual economic reward for making accurate predictions reduces the influence of the majority. In Experiment 2, we show a reduced influence of a majority herd's inaccurate predictions when requiring assessments of the accuracy of the majority herd's predictions as compared to requiring judgments of their consistency. Experiment 3 shows that a lower volatility of stock prices reduces the influence of a majority herd's inaccurate predictions.

PurposeThe purpose of this paper is to investigate whether stock price predictions and investment decisions improve by exposure to increasing price series.Design/methodology/approachThe authors conducted three laboratory experiments in which undergraduates were asked to role‐play being investors buying and selling stock shares. Their task was to predict an unknown closing price from an opening price and to choose the number of stocks to purchase to the opening price (risk aversion) or the closing price (risk taking). In Experiment 1 stock prices differed in volatility for increasing, decreasing or no price trend. Prices were in different conditions provided numerically for 15 trading days, for the last 10 trading days, or for the last five trading days. In Experiment 2 the price series were also visually displayed as scatter plots. In Experiment 3 the stock prices were presented for the preceding 15 days, only for each third day (five days) of the preceding 15 days, or as five prices, each aggregated for three consecutive days of the preceding 15 days. Only numerical price information was provided.FindingsThe results of Experiments 1 and 2 showed that predictions were not markedly worse for shorter than longer price series. Possibly because longer price series increase information processing load, visual information had some influence to reduce prediction errors for the longer price series. The results of Experiment 3 showed that accuracy of predictions increased for less price volatility due to aggregation, whereas again there was no difference between five and 15 trading days. Purchase decisions resulted in better outcomes for the aggregated prices.Research limitations/implicationsInvestorś performance in stock markets may not improve by increasing the length of evaluation intervals unless the quality of the information is also increased. The results need to be verified in actual stock markets.Practical implicationsThe results have bearings on the design of bonus systems.Originality/valueThe paper shows how stock price predictions and buying and selling decisions depend on amount and quality of information about historical prices.

We compare seven major European and North American sustainability analyst organizations on how they rank-order the same set of companies with regards to environmental performance. We also compare the analyst organizations' environmental rating schemes with regards to which evaluation criteria they include. Two industries are investigated: automobile and paper/forestry. Although there is fairly broad consensus on which automobile companies have the worst environmental performance, there is considerable disagreement about best-performers. The pattern is less clear for paper/forestry companies. With some notable exceptions, and for both industries, all rating schemes contain evaluation criteria targeting those aspects of company performance associated, according to life-cycle assessments, with the largest potential environmental impact. There are, however, significant divergences as to how many, and which, criteria of medium to low relevance are applied. Sustainability analyst organizations should make explicit to investors and evaluated companies on which theoretical and empirical grounds environmental evaluation criteria are selected. Copyright (C) 2011 John Wiley & Sons, Ltd and ERP Environment.

Bonuses in the finance sector may be based on too short time intervals for environmental and social factors to be taken into account in investment decisions. We report two experiments to investigate whether investors prefer short-term to long-term bonuses. In Experiment 1 employing 27 undergraduates, preferences were measured for four short-term certain bonuses, evenly distributed across a time interval, and one certain long-term bonus at the end of the time interval. A majority chose the short-term bonuses, and in order for the long-term bonus to be equally preferred it had to be about 40% higher than the four added short-term bonuses. Experiment 2 employing another 36 undergraduates introduced outcome uncertainty that more accurately reflects the choices stock investors face. The participants again choose between a long-term bonus and four distributed short-term bonuses. It was shown that uncertainty made more participants prefer the long-term bonus to the added short-term bonuses than when the outcome was certain. A smaller increase of the long-term bonus of about 20% was now required to make it equally attractive as the four added short-term bonuses.

In the Swedish Premium Pension Scheme (PPS) all citizens in paid employment allocate part of their public pension savings to mutual funds. In so doing they tend to distribute their choices maximally across different stock fund categories. It is hypothesised that this reflects the naïve application of a variety‐inducing diversification heuristic. The results of two experiments simulating choices of fund categories in the PPS support this hypothesis by showing that participating undergraduates chose stock funds investing in overlapping and non‐overlapping markets or industries in a way demonstrating failure to take into account covariation among fund returns. Administrators of the PPS and similar defined‐contribution pension plans should provide participants with comprehensive advice on how to diversify their investment. Dans le régime de retraite suédois (PPS), tous les citoyens ayant un emploi salarié allouent une part de l'épargne de leur retraite publique à des fonds d'investissements. Ce faisant, ils tendent majoritairement à répartir leurs choix dans différentes catégories de fonds. On a fait l'hypothèse que cela reflète l'application naïve d'une heuristique de la diversification. Les résultats de deux expérimentations simulant des choix entre différentes catégories de fonds pour le PPS confirment cette hypothèse : les sujets (étudiants) ont choisi des fonds en actions et devaient investir sur des marchés ou dans des branches industrielles relevant ou non du même secteur économique et cela d'une façon qui mettait en évidence leur incapacitéà prendre en considération le fait que le retour sur investissement de différents fonds pouvait être lié. Les administrateurs du PPS et de plans de pensions avec versements programmés devraient fournir aux participants des conseils avisés sur la façon de diversifier leur investissement.

Interviews with Swedish investment professionals show that incentivising stock portfolio managers on the basis of short term returns performance is a widespread practice across several types of fund management. Among retail funds, state pension funds, and hedge funds, bonuses are predominantly based on one-year intervals. Longer-term bonus components, if offered, are generally of insignificant size. Small fund companies may offer longer-term bonuses, but then as incentive not only to produce good results but also – if results are good – to stay at the company for a longer time. Pension insurance companies also apply longer-term bonuses, possibly because they do not risk money being withdrawn by investors due to poor performance. Experimental studies are needed in order to disentangle the effects of longer term bonuses on sustainable investments.

Herding in financial markets refers to that investors are influenced by others. This study addresses the importance of consistency for herding. It is suggested that, in financial markets perceptions of consistency are based on repeated observations over time. Consistency may then be perceived as the agreement across time between investors' predictions. In addition, consistency may be related to variance over time in each investor's predictions. In an experiment using a Multiple Cue Probability Learning paradigm, 96 undergraduates made multi-trial predictions of future stock prices given information about the current price and the predictions made by five fictitious others. Consistency was varied between the others' predictions (correlation) and within the others' predictions (variance). The results showed that the predictions were significantly influenced by the others' predictions when these were cot-related. No effect of variance was observed. Hence, participants were influenced by the others when they were in agreement, regardless of whether they varied their predictions over trials or not. Copyright (C) 2008 John Wiley & Sons, Ltd.