Nudging the financial market? A review of the nudge theory

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Abstract

A systematic review of the nudge literature and an examination of its applications across different domains reveals that: (i) a nudge, in the sense of using choice architecture to push people to choose desired results, works well; and (ii) a nudge, in the sense of pushing people to choose desired results so that people will be better off, remains questionable. In financial markets, regulators and financial intermediaries currently use nudge theory to: (i) adjust how investment choices are presented to investors; and (ii) provide information in a selective way. Besides nudging investors, it is also possible for regulators to nudge financial intermediaries towards making more ethical decisions.
Original languageEnglish
Pages (from-to)3341-3365
Number of pages25
JournalAccounting and Finance
Volume60
Issue number4
Early online date28 Mar 2019
DOIs
Publication statusPublished - Dec 2020
Externally publishedYes

Bibliographical note

Copyright © 2019 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

  • Financial market
  • Investment decision-making
  • Nudge

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