Seminar: The habit-forming effects of feedback: Evidence from a large-scale field experiment

We document the dynamics of persistence using a large-scale field experiment that provides cost salience nudges with different cycles of duration. Households respond asymmetrically: behavior quickly adjusts to these nudges and sluggishly readjusts without them. We then develop a habit formation model that nests traditional consumption-based mechanisms and an attention-based mechanism that allows for dynamic responses to time-varying salience. Combining our field experiment and structural model, we validate the importance of attention dynamics and uncover a new solution concept for optimizing feedback interventions to create sustained behavioral change.

University of Amsterdam, Roeterseilandcampus, room E0.22