A Nudge Isn’t Always Enough

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The brief’s key findings are:

  • Defaults, such as 401(k) auto-enrollment, have encouraged people to adopt behaviors that align with their intentions.
  • Researchers have begun to explore what happens when the default may not align with intentions.
  • A new experiment tested whether defaults could encourage low-income tax filers to invest about 10 percent of their refunds in U.S. Savings Bonds.
  • The default did not work: only 9 percent of the experimental group purchased bonds, no different than the control group.
  • The evidence suggests a likely explanation: participants had plans to spend their refunds.