Skip to content

Oren Bar-Gill & Alma Cohen, How to Communicate the Nudge: A Real-World Policy Experiment, 65 J. L. & Econ. 607 (2022).

Abstract: Disclosure-based nudges are increasingly utilized by governments around the world to achieve policy goals related to health, safety, employment, environmental protection, retirement savings, credit, debt, and more. Yet, a critical aspect of these nudge-type policy interventions—the mode of communication—remains unexplored. We study the effects of the communication medium on debt collection procedures, using a policy experiment conducted in cooperation with the Israeli Ministry of Justice. Debtors often lack adequate information about the debt, the judgment, and the enforcement and collection procedures. As a result, the process of debt collection is often harmful to the debtor and ineffective in securing repayment. We manipulate the choice of medium--telephone, regular mail, text message, and video message--holding fixed the content of the communication. We find that digital communication strategies, in particular, communicating via text message, were the most cost-effective, significantly improving the outcomes for both debtors and creditors.