Juan Pedro Ronconi, Universidad de Los Andes

Paper: Nudges, Managerial Planning, and Small Firm Performance: Evidence from Online Commerce

Abstract: This paper provides experimental evidence that nudging managers to plan in advance for a business opportunity can improve firm performance. I leverage an experiment involving 9,700 small e-commerce firms in Argentina and Brazil, which took place during the two weeks before Black Friday (BF), a major sales event. The intervention consisted of randomizing messages reminding managers that BF was approaching and encouraging them to plan their pricing and advertising strategies. Consistent with enhanced planning, treated firms shifted from generic to discount-related advertising and increased their inventories before the event. This led to an increase in sales of between 4% and 6% for up to 70 days post-intervention. A causal forest estimation reveals that the effects were stronger among relatively larger firms that use search engine optimization (SEO) tools, suggesting that pre-established capabilities may be a complement to light touch interventions.