Why Default Nudges Work: Identifying Cognitive Mechanism with fMRI

Default nudges are widely used and effective, but their mechanisms remain unclear. We test whether ease, endowment, or endorsement effects drive choices. In an online randomized experiment, the endowment channel emerges as the driver. We then use a novel fMRI approach that constructs brain activity maps of cognitions and uses them to trace their variation in each cognition during decision-making. Our approach validates treatments by confirming they elicit the intended cognitions and uses them as instruments to identify the causal effect of cognition on choice. Results are consistent with endowment driving default nudge effectiveness, suggesting policy designs should leverage it.

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Publication Details

Published
2025-10-03
DOI
https://doi.org/10.31235/osf.io/wfrsp_v2
Primary Topic
Financial Literacy, Pension, Retirement Analysis
Type
article
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Why Default Nudges Work: Identifying Cognitive Mechanism with fMRI

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Financial Literacy, Pension, Retirement Analysis
article

Why Default Nudges Work: Identifying Cognitive Mechanism with fMRI

Katsunori Yamada, Kosuke Uetake, Kohei Kawaguchi, Yasutora Watanabe, Junichi Chikazoe, Kanji Suzuki
article en

Abstract

Default nudges are widely used and effective, but their mechanisms remain unclear. We test whether ease, endowment, or endorsement effects drive choices. In an online randomized experiment, the endowment channel emerges as the driver. We then use a novel fMRI approach that constructs brain activity maps of cognitions and uses them to trace their variation in each cognition during decision-making. Our approach validates treatments by confirming they elicit the intended cognitions and uses them as instruments to identify the causal effect of cognition on choice. Results are consistent with endowment driving default nudge effectiveness, suggesting policy designs should leverage it.

Openalex Percentile: Top 60%
Financial Literacy, Pension, Retirement Analysis
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