How nudges and marketing, frame time preference “for your own good”: a behavioral model

Abstract

AbstractMarketing and nudges rely on choice framing to « do you good »: whether encouraging you to indulge in the pleasures of a pastry (marketing) or to save for retirement (nudges). What sets them apart? This article makes a threefold contribution in understanding their differences. First, it shows that marketing and nudges differ in their interpretation of “your interest”. Marketing emphasizes immediate gratification and succumbing to temptation, while nudges prioritize our future well-being. Second, this difference manifests itself in the role of time preference. Marketing exploits our lack of self-control to influence behavior, whereas nudges help individuals resist the lure of immediate rewards. In doing so, nudges overcome deep-rooted behavioral and neural mechanisms. Finally, the article develops a behavioral model common to marketing and nudges that shows how they use similar behavioral tools to promote and mitigate time preference, respectively.