Andris Saulītis (Rīga Stradiņš University) – Lea Katharina Kröger (European University Institute)

“Nudging to Save: an Online Field Experiment on Savings Behaviour”

Abstract. We propose an online field experiment to examine the effect of nudges on encouraging individuals to save and avoid risky financial behaviour. While prize-linked initiatives (PLI) that provide various financial offers to subjects have shown to be one of the most effective ways to increase savings, PLI tend to attract individuals with high levels of personal optimism and risk preferences. At the same time, various nudging strategies that do not include financial incentives, such as social norms and passive choice, have shown to encourage savings behaviour for a larger set of the population. Our experimental design offers the possibility to gather insights into how individuals allocate their income to immediate consumption, a standard savings account or a lottery when they are nudged with non-financial incentives instead of PLI.