The Target Opportunity Costs of Successful Nudges

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Nudges are increasingly popular, in large part due to the typically low costs required to implement them. Yet most often the main cost of nudging is due not to their implementation, but rather to the opportunity costs of its successful change of the behavior of its targets. Accounting for these target opportunity costs is essential for the appropriate assessment of the welfare effects of nudges. Nonetheless, the extant literature on behavioral policies largely ignores these costs or underestimates their magnitude and, consequently, overestimates the net benefits of nudges. At times, nudges remain the most attractive policy alternative even after their opportunity costs are accounted for. On other occasions, however, traditional instruments or a no-intervention approach turn out to make more efficient policy alternatives.

Original languageEnglish
Title of host publicationEconomic Analysis of Law in European Legal Scholarship
PublisherSpringer Nature
Number of pages15
StatePublished - 2021

Publication series

NameEconomic Analysis of Law in European Legal Scholarship
ISSN (Print)2512-1294
ISSN (Electronic)2512-1308

Bibliographical note

Publisher Copyright:
© 2021, The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG.

ASJC Scopus subject areas

  • Economics and Econometrics
  • Law


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