‘More Failed Nudges: Evidence of Ineffective “Behaviorally Informed” Disclosures’

Enrique Seira, Alan Elizondo and Eduardo Laguna-Müggenburg, 9 American Economic Journal: Economic Policy 277 (2017). As Truth-in-Lending laws are celebrating half a century of failure, and as consumers – especially those with low income – continue to make disastrous credit decisions, lawmakers are looking to reboot the disclosure paradigm. Energized by insights from behavioral economics, Twenty-First Century regulators are rapidly discarding the old idea of ‘comprehensive’ disclosure, developing instead psychologically-smart, graphically-appealing, and timely-relevant compact disclosure templates. But now, a new study by Seira et al has put to the test an array of these smart disclosures. And the results are devastating … (more)

[Omri Ben-Shahar, JOTWELL, 10 August]

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