Behavioral Scientist: Are Repeat Nudges Effective? For Tardy Tax Filers, It Seems So

June 7, 2021 —

Behavioral Scientist recently published insight co-authored by Nina Mazar, Marketing Professor and Co-Director of The Susilo Institute for Ethics in The Global Economy. The article discusses Nina’s and her co-authors’ research, which focused on testing the effectiveness of planning prompts on organizations’ tax compliance through repetitive nudges.

In the field experiment, the authors focused on all organizations that failed to file timely annual returns for a payroll tax during the 2013 and 2014 tax years- around 6,300 and 6,200 organizations, respectively. Organizations that were late filing were randomly assigned to receive one late notice, each year, independently. This random assignment allowed the research team to compare how effective their nudge was when only seen once versus twice. The findings revealed there was a trend toward the experimental letter being more effective for those organizations previously exposed to it.

“We found that our planning prompt intervention increased organizations’ tax compliance, and these effects replicated across both tax years. Organizations that received our experimental letter were significantly faster filing their taxes, filing an average of 4.1 days and 5.3 days sooner, respectively.”