Nudging Debtors to Pay Their Debt: Two Randomized Controlled Trials

Abstract

We conducted two large-scale, highly powered randomized controlled trials intended to encourage consumer debt repayments. In Study 1, we implemented ve treatments varying the design of envelopes sent to debtors. We did not nd any treatment e ects on response and repayment rates compared to the control condition. In Study 2, we varied the letters' contents in nine treatments, implementing factorial combinations of social norm and (non-)deterrence nudges, which were either framed emotively or non-emotively. We nd that all nudges are ine ective compared to the control condition and even tend to induce back ring e ects compared to the agency's original letter. Since comparable nudges have been shown to be highly e ective in other studies, our study supports the literature, emphasizing that the success of nudging interventions crucially depends on the domain of application.