Book contents
- The Cambridge Handbook of Compliance
- The Cambridge Handbook of Compliance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- 1 Introduction: Compliance as the Interaction between Rules and Behavior
- Part I Compliance Concepts and Approaches
- Part II Deterrence and Incapacitation
- Part III Incentives
- Part IV Legitimacy and Social Norms
- Part V Capacity and Opportunity
- Part VI Compliance and Cognition
- 36 Heuristics and Biases in the Criminology of Compliance
- 37 Prospect Theory and Tax Compliance
- 38 Nudging Compliance
- Part VII Management and Organizational Processes
- Part VIII Measuring and Evaluating Compliance
- Part IX Analysis of Particular Fields
- References
38 - Nudging Compliance
from Part VI - Compliance and Cognition
Published online by Cambridge University Press: 07 May 2021
Book contents
- The Cambridge Handbook of Compliance
- The Cambridge Handbook of Compliance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- 1 Introduction: Compliance as the Interaction between Rules and Behavior
- Part I Compliance Concepts and Approaches
- Part II Deterrence and Incapacitation
- Part III Incentives
- Part IV Legitimacy and Social Norms
- Part V Capacity and Opportunity
- Part VI Compliance and Cognition
- 36 Heuristics and Biases in the Criminology of Compliance
- 37 Prospect Theory and Tax Compliance
- 38 Nudging Compliance
- Part VII Management and Organizational Processes
- Part VIII Measuring and Evaluating Compliance
- Part IX Analysis of Particular Fields
- References
Summary
Abstract: In recent decades, a new approach to regulations and compliance was developed to complement the traditional instruments, such as command-and-control and economic instruments. This approach is termed ‘nudging’ or ‘choice architecture’ as it proposes to design the environment in which individuals make choices, in order to promote welfare enhancing behaviour. By utilising insights from behavioural sciences, nudges direct people’s behaviour without limiting their choices. In this chapter, we explain the concept of ‘choice architecture’ and review specific ‘compliance nudges’ in both the public and the private spheres. These include – amongst others – nudges that promote tax compliance, guideline-compliant drugs prescribing, and timely loan and fee repayments. The reviewed nudges include salience nudges, which emphasise certain aspects of a choice to make people focus on it; moral suasion nudges, which make more visible the moral consequences of people’s decisions; and descriptive or injunctive social norms nudges, informing people what others are doing or believe should be done. Furthermore, we discuss the empirical literature demonstrating the effectiveness (or lack of it) of compliance nudges. Whilst it is not easy to compare the effectiveness and cost-effectiveness of these nudges across different fields of application, some conclusions are reached regarding the effectiveness of compliance nudges in general. Finally, we point out the limitations of nudging compliance, compared to the traditional tools, and present some thoughts on possible future developments. The area of nudging compliance has the potential to develop rapidly as technological advancements make compliance monitoring, and automated nudging, possible. Whilst nudging is a promising way forward in compliance, ethical questions remain about the proper extent of its use, and further research is required into the long-term effectiveness of this technique.
- Type
- Chapter
- Information
- The Cambridge Handbook of Compliance , pp. 551 - 568Publisher: Cambridge University PressPrint publication year: 2021
References
Agarwal, Sumit, Chomsisengphet, Souphala, Mahoney, Neale, and Stroebel, Johannes. 2014. ‘Regulating Consumer Financial Products: Evidence from Credit Cards’. Quarterly Journal of Economics 130(1): 111–64.Google Scholar
Allcott, Hunt. 2011. ‘Social Norms and Energy Conservation.’ Journal of public Economics 95(9–10): 1082–95.Google Scholar
Allcott, Hunt, and Rogers, Todd. 2014. ‘The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation’. American Economic Review 104(10): 3003–37.CrossRefGoogle Scholar
Amar, Moty, Ariely, Dan, Ayal, Shahar, Cryder, Cynthia E., and Rick, Scott I.. 2011. ‘Winning the Battle but Losing the War: The Psychology of Debt Management’. Journal of Marketing Research 48(SPL): S38–S50.Google Scholar
Araña, Jorge E., and León, Carmelo J.. 2013. ‘Can Defaults Save the Climate? Evidence from a Field Experiment on Carbon Offsetting Programs’. Environmental and Resource Economics 54(4): 613–26.Google Scholar
Ariel, Barak. 2012. ‘Deterrence and Moral Persuasion Effects on Corporate Tax Compliance: Findings from a Randomized Controlled Trial’. Criminology 50(1): 27–69.Google Scholar
Arno, Anneliese, and Thomas, Steve. 2016. ‘The Efficacy of Nudge Theory Strategies in Influencing Adult Dietary Behaviour: A Systematic Review and Meta-analysis’. BMC public health 16(1): 676.Google Scholar
Asensio, Omar I., and Delmas, Magali A.. 2015. ‘Nonprice Incentives and Energy Conservation’. Proceedings of the National Academy of Sciences 112(6): E510–E515.Google Scholar
Benartzi, Shlomo, Beshears, John, Milkman, Katherine L., Sunstein, Cass R., Thaler, Richard H., Shankar, Maya, Tucker-Ray, Will, Congdon, William J., and Galing, Steven. 2017. ‘Should Governments Invest More in Nudging?’ Psychological science 28(8): 1041–55.Google Scholar
Blumenthal, Marsha, Christian, Charles W., and Slemrod, Joel. 2001. ‘Do Normative Appeals Affect Tax Compliance? Evidence from a Controlled Experiment in Minnesota.’ National Tax Journal. 54. 10.17310/ntj.2001.1.06.Google Scholar
Bott, Kristina Maria, Cappelen, Alexander W., Sorensen, Erik, and Tungodden, Bertil. 2017. ‘You’ve Got Mail: A Randomised Field Experiment on Tax Evasion’. http://dx.doi.org/10.2139/ssrn.3033775.Google Scholar
Brandon, Alec, Ferraro, Paul J., List, John A., Metcalfe, Robert D., Price, Michael K., and Rundhammer, Florian. 2017. ‘Do the Effects of Social Nudges Persist? Theory and Evidence from 38 Natural Field Experiments.’ National Bureau of Economic Research No. w23277.Google Scholar
Bronchetti, Erin Todd, Dee, Thomas S., Huffman, David B., and Magenheim, Ellen. 2011. ‘When a Nudge Isn’t Enough: Defaults and Saving among Low-Income Tax Filers’, National Bureau of Economic Research No. w16887.Google Scholar
Bruns, Hendrik, Kantorowicz-Reznichenko, Elena, Klement, Katharina, Luistro, Marijane Jonsson, and Rahali, Bilel. 2018. ‘Can Nudges Be Transparent and yet Effective?’ Journal of Economic Psychology 65(2018): 41–59.CrossRefGoogle Scholar
Bucher, Tamara, Collins, Clare, Rollo, Megan E., McCaffrey, Tracy A., de Vlieger, Nienke, van der Bend, Daphne, Truby, Helen, and Perez-Cueto, Federico J. A.. 2016. ‘Nudging Consumers towards Healthier Choices: A Systematic Review of Positional Influences on Food Choice’. British Journal of Nutrition 115(12): 252–63.CrossRefGoogle ScholarPubMed
Cadena, Ximena, and Schoar, Antoinette. 2011. ‘Remembering to Pay? Reminders vs. Financial Incentives for Loan Payments’. National Bureau of Economic Research No. w17020.Google Scholar
Castleman, Benjamin L., and Page, Lindsay C.. 2015. ‘Summer Nudging: Can Personalized Text Messages and Peer Mentor Outreach Increase College Going among Low-Income High School Graduates?’ Journal of Economic Behavior & Organization 115(2015): 144–60.Google Scholar
Chivers, Ben, and Barnes, Geoffrey. 2018. ‘Sorry, Wrong Number: Tracking Court Attendance Targeting through Testing a “Nudge” Text’. Cambridge Journal of Evidence-Based Policing 2(1–2): 4–34.Google Scholar
Cialdini, Robert B., Reno, Raymond R., and Kallgren, Carl A. 1990. ‘A Focus Theory of Normative Conduct: Recycling the Concept of Norms to Reduce Littering in Public Places’. Journal of Personality and Social Psychology 58(6): 1015–26.Google Scholar
Cialdini, Robert B., Kallgren, Carl A., and Reno, Raymond R.. 1991. ‘A Focus Theory of Normative Conduct: A Theoretical Refinement and Reevaluation of the Role of Norms in Human Behavior’ in Advances in Experimental Social Psychology, Vol. 24, edited by Berekowitz, L., 201–34. San Diego, CA: Academic Press.Google Scholar
Cumberbatch, Jonathan R., and Barnes, Geoffrey C.. 2018. ‘This Nudge Was Not Enough: A Randomised Trial of Text Message Reminders of Court Dates to Victims and Witnesses’. Cambridge Journal of Evidence-Based Policing 2(1–2): 35–51.CrossRefGoogle Scholar
Dinner, Isaac, Johnson, Eric J., Goldstein, Daniel G., and Liu, Kaiya. 2011. ‘Partitioning Default Effects: Why People Choose Not to Choose’. Journal of Experimental Psychology: Applied 17(4): 332.Google Scholar
Fellner, Gerlinde, Sausgruber, Rupert, and Traxler, Christian. 2013. ‘Testing Enforcement Strategies in the Field: Threat, Moral Appeal and Social Information’. Journal of the European Economic Association 11(3): 634–60.Google Scholar
Fischhoff, Baruch. 1982. ‘Debiasing’ in Judgment under Uncertainty: Heuristics and Biases, edited by Kahneman, Daniel, Slovic, Paul and Tversky, Amos, 422–44. Harvard, MA: Cambridge University Press.Google Scholar
Hallsworth, Michael. 2014. ‘The Use of Field Experiments to Increase Tax Compliance’. Oxford Review of Economic Policy 30(4): 658–79.Google Scholar
Hallsworth, Michael, Berry, Dan, Sanders, Michael, Sallis, Anna, King, Dominic, Vlaev, Ivo, and Darzi, Ara. 2015. ‘Stating Appointment Costs in SMS Reminders Reduces Missed Hospital Appointments: Findings from Two Randomised Controlled Trials’. PloS one 10(9): e0137306.Google Scholar
Hallsworth, Michael, List, John A., Metcalfe, Robert D., and Vlaev, Ivo. 2017. ‘The Behavioralist as Tax Collector: Using Natural Field Experiments to Enhance Tax Compliance’. Journal of Public Economics 148: 14–31.Google Scholar
Hammond, David, Fong, Geoffrey T., Borland, Ron, Cummings, K. Michael, McNeill, Ann, and Driezen, Pete. 2007. ‘Text and Graphic Warnings on Cigarette Packages: Findings from the International Tobacco Control Four Country Study’. American Journal of Preventive Medicine 32(3): 202–9.Google Scholar
Haugh, Todd. 2017. ‘Nudging Corporate Compliance’. American Business Law Journal 54(4): 683–741.Google Scholar
Jachimowicz, Jon M., Duncan, Shannon, Weber, Elke U., and Johnson, Eric J.. 2019. ‘When and Why Defaults Influence Decisions: A Meta-analysis of Default Effects’. Behavioural Public Policy 3(2): 1–28.CrossRefGoogle Scholar
John, Peter. 2018. How Far to Nudge? Assessing Behavioural Public Policy. Cheltenham, UK: Edward Elgar.Google Scholar
Johnson, Eric J., and Goldstein, Daniel. 2003. ‘Do Defaults Save Lives?’ Science 302(5649): 1338–9.Google Scholar
Johnson, Eric J., Häubl, Gerald, and Keinan, Anat. 2007. ‘Aspects of Endowment: A Query Theory of Value Construction’. Journal of Experimental Psychology: Learning, Memory, and Cognition 33(3): 461.Google Scholar
Jolls, Christine, Sunstein, Cass R., and Thaler, Richard. 1998. ‘A Behavioral Approach to Law and Economics’. Stanford Law Review 50(5): 1471–1550.Google Scholar
Karlan, Dean, Morten, Melanie, and Zinman, Jonathan. 2012. ‘A Personal Touch: Text Messaging for Loan Repayment.’ National Bureau of Economic Research No. w17952.Google Scholar
Kettle, Stewart, Hernandez, Marco, Ruda, Simon, and Sanders, Michael. 2016. ‘Behavioral Interventions in Tax Compliance: Evidence from Guatemala’. World Bank Policy Research Working Paper 7690.Google Scholar
Killingsworth, Scott. 2017. ‘Behavioral Ethics: From Nudges to Norms’. www.bclplaw.com/images/content/8/9/v2/89927/2017–01-jan-feb-ethikos-killingsworth.pdf.Google Scholar
Korobkin, Russell B., and Ulen, Thomas S.. 2000. ‘Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics’. California Law Review 88(4): 1051–1144.Google Scholar
Kroese, Floor M., Marchiori, David R., and de Ridder, Denise T. D.. 2015. ‘Nudging Healthy Food Choices: A Field Experiment at the Train Station’. Journal of Public Health 38(2): e133–e137.Google Scholar
Lourenço, Joana Sousa, Ciriolo, Emanuele, Almeida, Sara Rafael, and Dessart, Francois J.. 2016. ‘Behavioural Insights Applied to Policy – Country Overviews 2016’. No. JRC100547. Joint Research Centre (Seville site).Google Scholar
Loewenstein, George, Bryce, Cindy, Hagmann, David, and Rajpal, Sachin. 2015. ‘Warning: You Are About to Be Nudged’. Behavioral Science & Policy 1(1): 35–42.Google Scholar
Madrian, Brigitte C., and Shea, Dennis F.. 2001. ‘The Power of Suggestion: Inertia in 401 (k) Participation and Savings Behavior’. Quarterly Journal of Economics 116(4): 1149–87.Google Scholar
McKenzie, Craig R. M., Liersch, Michael J., and Finkelstein, Stacey R.. 2006. ‘Recommendations Implicit in Policy Defaults’. Psychological Science 17(5): 414–20.Google Scholar
Meeker, Daniella, Knight, Tara K., Friedberg, Mark W., Linder, Jeffrey A., Goldstein, Noah J., Fox, Craig R., Rothfeld, Alan, Diaz, Guillermo, and Doctor, Jason N.. 2014. ‘Nudging Guideline-Concordant Antibiotic Prescribing: A Randomized Clinical Trial’. JAMA internal medicine 174(3): 425–31.Google Scholar
Meeker, Daniella, Linder, Jeffrey A., Fox, Craig R., Friedberg, Mark W., Persell, Stephen D., Goldstein, Noah J., Knight, Tara K., Hay, Joel W., and Doctor, Jason N.. 2016. ‘Effect of Behavioral Interventions on Inappropriate Antibiotic Prescribing among Primary Care Practices: A Randomized Clinical Trial’. Jama 315(6): 562–70.Google Scholar
OECD. 2017. ‘Use of Behavioural Insights in Consumer Policy’. OECD Science, Technology and Industry Policy Papers No. 36. Paris: OECD Publishing. https://doi.org/10.1787/c2203c35-en.Google Scholar
Oreopoulos, Philip, and Petronijevic, Uros. 2019. ‘The Remarkable Unresponsiveness of College Students to Nudging and What We Can Learn from It’. National Bureau of Economic Research No. w26059.Google Scholar
Pärnamets, Philip, Johansson, Petter, Hall, Lars, Balkenius, Christian, Spivey, Michael J., and Richardson, Daniel C.. 2015. ‘Biasing Moral Decisions by Exploiting the Dynamics of Eye Gaze’. Proceedings of the National Academy of Sciences 112(13): 4170–5.Google Scholar
Paunov, Yavor, Wänke, Michaela, and Vogel, Tobias. 2018. ‘Transparency Effects on Policy Compliance: Disclosing How Defaults Work Can Enhance Their Effectiveness’. Behavioural Public Policy. doi:10.1017/bpp.2018.40.Google Scholar
Peth, Denise, Mußhoff, Oliver, Funke, Katja, and Hirschauer, Norbert. 2018. ‘Nudging Farmers to Comply with Water Protection Rules: Experimental Evidence from Germany’. Ecological economics 152(2018): 310–21.Google Scholar
Rebonato, Riccardo. 2012. Taking Liberties: A Critical Examination of Libertarian Paternalism. New York: Palgrave Macmillan, pp. 89–248.Google Scholar
Reisch, L. A., and Sunstein, C. R.. 2016. ‘Do Europeans Like Nudges?’ Judgement and Decision Making 11(4): 310–25.Google Scholar
Robotham, Dan, Satkunanathan, Safarina, Reynolds, John, Stahl, Daniel, and Wykes, Til. 2016. ‘Using Digital Notifications to Improve Attendance in Clinic: Systematic Review and Meta-analysis’. BMJ Open 6(10): e012116.Google Scholar
Rozin, Paul, Scott, Sydney E., Dingley, Megan, Urbanek, Joanna K., Jiang, Hong, and Kaltenbach, Mark. 2011. ‘Nudge to Nobesity I: Minor Changes in Accessibility Decrease Food Intake’. Judgment and Decision Making 6(4): 323–32.Google Scholar
Sacarny, Adam, Yokum, David, Finkelstein, Amy, and Agrawal, Shantanu. 2016. ‘Medicare Letters to Curb Overprescribing of Controlled Substances Had No Detectable Effect on Providers’. Health Affairs 35(3): 471–9.Google Scholar
Shu, Lisa L., Mazar, Nina, Gino, Francesca, Ariely, Dan, and Bazerman, Max H.. 2012. ‘Signing at the Beginning Makes Ethics Salient and Decreases Dishonest Self-Reports in Comparison to Signing at the End’. Proceedings of the National Academy of Sciences 109(38): 15197–200.Google Scholar
Silva, Antonio, and John, Peter. 2017. ‘Social Norms Don’t Always Work: An Experiment to Encourage More Efficient Fees Collection for Students’. PLoS One 12(5). https://doi.org/10.1371/journal.pone.0177354.Google Scholar
Slemrod, Joel. 2016. ‘Tax Compliance and Enforcement: New Research and Its Policy Implications’. Ross School of Business Working Paper No. 1302, January.Google Scholar
Steffel, Mary, Williams, Elanor F., and Pogacar, Ruth. 2016. ‘Ethically Deployed Defaults: Transparency and Consumer Protection through Disclosure and Preference Articulation’. Journal of Marketing Research 53(5): 865–80.Google Scholar
Sunstein, Cass R. 1997. ‘Behavioral Analysis of Law’. University of Chicago Law Review 64(4): 1175–95.Google Scholar
Sunstein, Cass R. 2015. Choosing Not to Choose: Understanding the Value of Choice. New York: Oxford University Press.Google Scholar
Sunstein, Cass R. 2016. ‘The Council of Psychological Advisers’. Annual Review of Psychology 67: 713–37.Google Scholar
Sunstein, Cass R., and Thaler, Richard H.. 2003. ‘Libertarian Paternalism Is Not an Oxymoron’. University of Chicago Law Review 70(4): 1159–1202.Google Scholar
Sunstein, Cass R., Reisch, Lucia A., and Rauber, Julius. 2018. ‘A Worldwide Consensus on Nudging? Not Quite, but Almost’. Regulation & Governance 12(1): 3–22.Google Scholar
Szaszi, Barnabas, Palinkas, Anna, Palfi, Bence, Szollosi, Aba, and Aczel, Balazs. 2018. ‘A Systematic Scoping Review of the Choice Architecture Movement: Toward Understanding When and Why Nudges Work’. Journal of Behavioral Decision Making 31(3): 355–66.Google Scholar
Tannenbaum, David, Doctor, Jason N., Persell, Stephen D., Friedberg, Mark W., Meeker, Daniella, Friesema, Elisha M., Goldstein, Noah J., Linder, Jeffrey A., and Fox, Craig R.. 2015. ‘Nudging Physician Prescription Decisions by Partitioning the Order Set: Results of a Vignette-Based Study’. Journal of General Internal Medicine 30(3): 298–304.Google Scholar
Thaler, Richard H., and Sunstein, Cass R.. 2003. ‘Libertarian Paternalism’. American Economic Review 93(2): 175–9.Google Scholar
Thaler, Richard H., and Sunstein, Cass R.. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness, ch. 5. New Haven, CT: Yale University Press.Google Scholar
Torgler, Benno. 2013. ‘A Field Experiment in Moral Suasion and Tax Compliance Focusing on Underdeclaration and Overdeduction’. FinanzArchiv: Public Finance Analysis 69(4): 393–411.Google Scholar
Wansink, Brian. 2016. Slim by Design: Mindless Eating Solutions for Everyday Life. New York/London etc.: Hay House.Google Scholar
Weber, Elke U., and Johnson, Eric J.. 2011. ‘Query Theory: Knowing What We Want by Arguing with Ourselves’. Behavioral and Brain Sciences 34(2): 91–2.Google Scholar
Youssef, Adel, Alharthi, Hana, Khaldi, Ohoud Al, Alnaimi, Fatima, Alsubaie, Nujood, and Alfariss, Nada. 2014. ‘Effectiveness of Text Message Reminders on Nonattendance of Outpatient Clinic Appointments in Three Different Specialties: A Randomized Controlled Trial in a Saudi Hospital’. Journal of Taibah University Medical Sciences 9(1): 23–9.Google Scholar
- 1
- Cited by