When the message hurts: The unintended impacts of nudges on saving

Abstract

We implement a field experiment in Romania to elucidate how informational nudges and goal setting impact saving. We find no evidence that text message reminders, either in the form of a general reminder or information about the saving goals of peers, encourage saving. Further, both types of messages discourage saving for participants who set a goal, particularly among high goal setters. We posit that informational nudges unintentionally increase the salience of unrealistic goals and engender boomerang effects that discourage high goal setters from saving. Among participants who received no messages, those who set goals save more, suggesting a tradeoff between commitment devices and informational nudges in this context.