Crowdsourcing as a tool for creating effective nudges: An example for financial oversubscription

Area of Science:

• Behavioral Economics
• Consumer Behavior
• Intervention Design

Background:

• Designing effective behavioral interventions, or nudges, is challenging due to unpredictable effectiveness.
• Large-scale field experiments (megastudies) show wide variation in nudge efficacy, often difficult for experts to predict.
• Consumer oversubscription of services presents a significant financial management challenge.

Purpose of the Study:

• To introduce and evaluate an Iterative Crowdsourcing Procedure for generating effective nudges.
• To address consumer oversubscription by enhancing subscription awareness.
• To compare the effectiveness of crowdsourced nudges against expert-generated nudges.

Main Methods:

• Developed an Iterative Crowdsourcing Procedure leveraging target population insights for nudge generation and preselection.
• Documented that individuals overestimate their number of subscriptions and desire to cancel when made aware.
• Conducted a large-scale field experiment (N = 4,412,113) with a bank to test crowdsourced nudges for subscription awareness.

Main Results:

• Individuals tend to have more subscriptions than they realize.
• Increasing subscription awareness leads to a desire to cancel unwanted subscriptions.
• Crowdsourced nudges significantly outperformed nudges developed by the bank in the field experiment.

Conclusions:

• The Iterative Crowdsourcing Procedure is an effective method for generating high-impact behavioral nudges.
• This technique can enhance existing intervention design methods or serve as a standalone approach.
• Crowdsourcing offers a valuable pathway to improve financial management interventions, specifically targeting subscription oversubscription.