Interpretation Nudges and Self-Control
Abstract: This paper studies interpretation nudges: noncoercive interventions that offer interpretations of an exogenous signal to help decision makers act in welfare-improving ways. Present-biased agents with heterogeneous priors observe a realization of a binary signal, select the best-fitting model from a menu containing a default, update beliefs, and decide whether to abstain from a vicious good. A planner maximizes prior-based welfare subject to pointwise no-harm relative to the baseline menu. In the binary environment, two non-default interpretations suffice for any welfare-improving finite menu, and two- sided improvement requires a conflicting pair. The design problem reduces to cutoff comparisons in the 1-0 conflicting family. A smoking-cessation calibration solves the cutoff comparison in closed form and shows why moderation outperforms maximal persuasion strength.