This summary is presented by the IPR Behavioral Insights Research Center

Key Findings

  • Default nudges can have multiple conflicting effects on behaviour, potentially leading them to negate the desired impact.
  • Establishing a default amount for charitable donations can increase donation amounts, but also lead to fewer donations.
  • When a default exists on a continuum, testing is required to determine the ideal default to maximize impact.

Implications for Public Relations

In addition to testing the effect of nudges on individual behaviour, it is critical to examine the broader net effect on a population over time and consider any effects nudges may have on processing other aspects of communication.

This research highlights the complexity of nudges. Although they are touted as simpler, cost-efficient, and often more effective means of influencing behaviour, compared to more conventional communication approaches, they have a wide range of effects beyond the intended behaviour change. When developing a nudge strategy, public relation professionals should test for these different effects and determine whether the overall outcome is desirable for both stakeholders and organizations.

In this example of charitable donations, default nudges can nudge people towards larger donations, but that benefit can disappear after factoring in the reduce number of donations. By testing multiple versions of a nudge, like different defaults along a continuum, practitioners can determine the best course of action.

Nudges also have the potential to distract from other aspects of communication, as demonstrated by the reduced impact of charity reputation and information on the decision-making process when default donation amounts were set. This distraction may be detrimental in the long run if the information is important for fostering a strong relationship with stakeholders.

Summary

Everyday decision-making is more often guided by intuition and emotion, rather than careful, concentrated thought. Nudges are interventions that bias our intuition towards a particular behaviour. One of the most widely used nudge is the default nudge, which sets a desired behaviour as the default choice. Having to change the status quo requires exerting energy to evaluate the costs and benefits of other choices, so most people end up accepting the default. The default can also serve as an anchor, leading decisions to skew towards it even if the default isn’t chosen, or an informative norm, suggesting that a particular choice is the most common or desired. A common example of this is how sign-ups provide the option to opt out of being on a mailing list, instead of opting in. By setting the default choice to opting in, people are more likely to end up on a mailing list.

Researchers, Goswami and Urminsky, investigated the application of default nudges work in a charity setting. In their study, participants were given the opportunity to donate some of the money they earned from completing an unrelated study. The default donation amount on the menu was varied to examine the effect on total donations.

The results showed that default nudges influenced behaviour, resulting in donations that were closer to the default amount. The low default nudge led to a scale-back effect, where the donations were smaller in value. However, in addition to the scale-back effect, there was a lower-bar effect, where more people donated when the default was low. This effect suggests that the low defaults motivated more people to donate. The reverse was observed when the default donation amount was high, with larger, but fewer donations.

Subsequent studies replicated these results with different menu presentations, default amounts, charities, and amounts of information about the charity. An additional observed effect was that the presence of default nudges distracted from other factors when donating like feelings towards the charity or information about the charity’s reputation. Participants donated more to charities that they liked and had positive ratings, but the impact of these factors was superseded by the nudge, suggesting that processing a default choice draws attention away from other considerations.

In a third study, the researchers observed scale-back and lower-bar effects for low default nudges, and the reverse effects for high default nudges, in a large-scale field experiment. Critically, across all the studies, there was no backlash effect on perceptions of the charities when nudges were used. People did not develop negative opinions about charities that set a default donation amount, regardless of how high the amount was.

Together, this research demonstrates the potential for nudges to cancel themselves out, highlighting the importance of testing nudges to observe the broader effect on a population over time, not just individual impact. Applying a default nudge can increase revenue from donations, but the optimal nudge amount depends on the size of the scale-back and lower-bar effects. Although effective, nudges are not a one-size-fit-all solution that applies to all circumstances. Several interacting psychological processes can influence the outcomes of nudging.

Citation

Goswami, I., & Urminsky, O. (2016). When should the ask be a nudge? The effect of default amounts on charitable donations. Journal of Marketing Research, 53(5), 829-846. https://doi.org/10.1509/jmr.15.0001

 

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Heidy Modarelli handles Growth & Marketing for IPR. She has previously written for Entrepreneur, TechCrunch, The Next Web, and VentureBeat.
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