When Nudges Backfire: The Effect of Social Norms, Framing Effects, and Default Options on the Pension Saving Decisions in China
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When Nudges Backfire: The Effect of Social Norms, Framing Effects, and Default Options on the Pension Saving Decisions in China

Yuming Dong 1* Zhaoyu Wang 2, Zhuting He 3
1 RCF Experimental School
2 Beijing Huijia Private School
3 Singapore American School
*Corresponding author: donyuming@rdfzcygj.cn
Published on 26 November 2025
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AEMPS Vol.245
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-569-1
ISBN (Online): 978-1-80590-570-7
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Abstract

This study investigates the impact of behavioral nudges—social norms, loss aversion framing, default options, and positive narrative—on voluntary pension saving decisions in China. Using a randomized controlled trial administered via an online survey with 220 participants, we examine how these interventions influence both the willingness to contribute and the proportion of income allocated to pension savings. Contrary to prevailing international evidence, our results indicate that all nudges significantly reduce willingness to contribute relative to a control group, with the most substantial backfire effects observed for positive narrative and default option nudges. Furthermore, we identify important heterogeneity effects across income groups and emphasize the moderating roles of education, gender, and financial motivation. These findings underscore the critical importance of cultural, institutional, and individual factors in the design and implementation of behavioral interventions. Policy measures tailored to specific demographic segments and focused on financial education and trust-building are recommended.

Keywords:

Behavioral Nudge, Pension Savings, Randomized Controlled Trial, China, Household Finance

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Dong,Y.;Wang,Z.;He,Z. (2025). When Nudges Backfire: The Effect of Social Norms, Framing Effects, and Default Options on the Pension Saving Decisions in China. Advances in Economics, Management and Political Sciences,245,8-21.

References

[1]. OECD. (2023). Pensions at a glance 2023: OECD and G20 indicators. OECD Publishing. https: //doi.org/10.1787/678055dd-en

[2]. Thaler, R. H., & Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness. Penguin Books.

[3]. Simon, H. A. (1957). Models of man: Social and rational. Wiley.

[4]. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124–1131.

[5]. Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: Inertia in 401(k) participation and savings behavior. The Quarterly Journal of Economics, 116(4), 1149–1187.

[6]. Cribb, J., & Emmerson, C. (2022). Automatic enrolment and pension saving in the UK. Economica, 89(355), 2053–2078.

[7]. Beshears, J., Choi, J. J., Laibson, D., & Madrian, B. C. (2008). The importance of default options for retirement saving outcomes: Evidence from the United States. In S. J. Kay & T. Sinha (Eds.), Lessons from pension reform in the Americas (pp. 59-87). Oxford University Press.

[8]. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–292.

[9]. Gam, J., Huang, K., & Zhao, M. (2021). Loss aversion and retirement savings. Journal of Consumer Research, 48(3), 4237–4255.

[10]. Duflo, E., & Saez, E. (2003). The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment. The Quarterly Journal of Economics, 118(3), 815–842.

[11]. Dur, R., Fleming, D., van Garderen, M., & van Lent, M. (2021). A social norm nudge to save more: A field experiment at a retail bank. Journal of Public Economics, 200, 104443.

[12]. Brehm, J. W. (1966). A theory of psychological reactance. Academic Press.

[13]. Osman, M. (2020). Psychological reactance and behavioral economics. In M. Altman (Ed.), Behavioral economics for dummies (pp. 215-230). For Dummies.

[14]. Bhargava, S., & Manoli, D. (2015). Psychological frictions and the incomplete take-up of social benefits: Evidence from an IRS field experiment. American Economic Review, 105(11), 3489–3529.

[15]. Bolton, P., Brunnermeier, M. K., & Veldkamp, L. (2020). Leadership, coordination, and corporate culture. The Review of Economic Studies, 87(4), 1735–1776.

[16]. Sunstein, C. R. (2017). Nudges that fail. Behavioural Public Policy, 1(1), 4–25.

[17]. Thunström, L., Nordström, J., Shogren, J. F., Ehmke, M., & van 't Veld, K. (2018). The effect of social norms on residential electricity consumption. Energy Policy, 115, 99-106.

[18]. Chen, Y., Liu, T., & Zhang, L. (2021). Pension reform and behavioral incentives in China. Journal of Aging Studies, 55, 100876.

References

[1]. OECD. (2023). Pensions at a glance 2023: OECD and G20 indicators. OECD Publishing. https: //doi.org/10.1787/678055dd-en

[2]. Thaler, R. H., & Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness. Penguin Books.

[3]. Simon, H. A. (1957). Models of man: Social and rational. Wiley.

[4]. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124–1131.

[5]. Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: Inertia in 401(k) participation and savings behavior. The Quarterly Journal of Economics, 116(4), 1149–1187.

[6]. Cribb, J., & Emmerson, C. (2022). Automatic enrolment and pension saving in the UK. Economica, 89(355), 2053–2078.

[7]. Beshears, J., Choi, J. J., Laibson, D., & Madrian, B. C. (2008). The importance of default options for retirement saving outcomes: Evidence from the United States. In S. J. Kay & T. Sinha (Eds.), Lessons from pension reform in the Americas (pp. 59-87). Oxford University Press.

[8]. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–292.

[9]. Gam, J., Huang, K., & Zhao, M. (2021). Loss aversion and retirement savings. Journal of Consumer Research, 48(3), 4237–4255.

[10]. Duflo, E., & Saez, E. (2003). The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment. The Quarterly Journal of Economics, 118(3), 815–842.

[11]. Dur, R., Fleming, D., van Garderen, M., & van Lent, M. (2021). A social norm nudge to save more: A field experiment at a retail bank. Journal of Public Economics, 200, 104443.

[12]. Brehm, J. W. (1966). A theory of psychological reactance. Academic Press.

[13]. Osman, M. (2020). Psychological reactance and behavioral economics. In M. Altman (Ed.), Behavioral economics for dummies (pp. 215-230). For Dummies.

[14]. Bhargava, S., & Manoli, D. (2015). Psychological frictions and the incomplete take-up of social benefits: Evidence from an IRS field experiment. American Economic Review, 105(11), 3489–3529.

[15]. Bolton, P., Brunnermeier, M. K., & Veldkamp, L. (2020). Leadership, coordination, and corporate culture. The Review of Economic Studies, 87(4), 1735–1776.

[16]. Sunstein, C. R. (2017). Nudges that fail. Behavioural Public Policy, 1(1), 4–25.

[17]. Thunström, L., Nordström, J., Shogren, J. F., Ehmke, M., & van 't Veld, K. (2018). The effect of social norms on residential electricity consumption. Energy Policy, 115, 99-106.

[18]. Chen, Y., Liu, T., & Zhang, L. (2021). Pension reform and behavioral incentives in China. Journal of Aging Studies, 55, 100876.

Cite this article

Dong,Y.;Wang,Z.;He,Z. (2025). When Nudges Backfire: The Effect of Social Norms, Framing Effects, and Default Options on the Pension Saving Decisions in China. Advances in Economics, Management and Political Sciences,245,8-21.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICFTBA 2025 Symposium: Data-Driven Decision Making in Business and Economics

ISBN: 978-1-80590-569-1(Print) / 978-1-80590-570-7(Online)
Editor: Lukášak Varti
Conference website: https://2025.icftba.org/Bratislava.html
Conference date: 12 December 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.245
ISSN: 2754-1169(Print) / 2754-1177(Online)

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