How Nudges Win Wallet Share in the Attention Economy

The Rise of Revenue-Based Lending

Bhattacharya’s recent work in the Journal of Operations Management examines revenue-based lending (RBL). This emerging financing option ties investor returns to the borrower's future revenue. The study analyzes how a South Korean P2P platform improved investor engagement and borrower outcomes using strategic nudges. Co-authors include Sunghun Chung, Chul Ho Lee, and Subodha Kumar.

Platform Scale and Risk

The RBL platform involved in this randomized controlled trial had over 25,000 registered investors. They allocated $210 million to more than 6,000 businesses. Data was collected from January 2022. The platform serves small and medium enterprises seeking capital. This introduces specific risks for investors. RBL adds a layer of risk because returns depend directly on the borrower's financial performance.

Experimental Design

Over eight weeks, from November 2021 to January 2022, the platform sent researcher-designed nudge messages. These were sent to investors who had previously opted in for SMS marketing. The experiment included four text message variants. Each variant targeted different psychological buttons. Researchers compared these against a simple message and a control group receiving no message.

Psychological Triggers

One message appealed to altruism, noting that loans help many people. Another used competition, urging recipients to outperform 80% of Korean adults. Two other nudges focused on ease and pre-commitment. One emphasized convenience: „Invest with just a few clicks.” The other highlighted financial goals: „Achieve your financial goal in the next five years.”

Measuring System Resilience

Researchers evaluated nudge performance by its impact on borrowers. Since RBL links investor returns to borrower revenue, this benefits both sides of the two-sided economy. „I measured whether these nudges made the system more resilient to short-term traps, such as liquidity losses,” says Bhattacharya.

Key Findings

Altruism and competition-based nudges had negligible impact. They produced results similar to simple messages. However, ease-convenience and pre-commitment nudges significantly improved capital flow. They reduced default rates and shortened repayment durations for SMEs. Investors receiving these messages were more active and engaged. They made faster decisions and connected more frequently. This translated into a stronger, steadier flow of funds to platform SMEs.

Online Study Validation

A similar model appeared in a US-based online study. 338 participants were exposed to the same nudge treatments. This consolidated the conclusions from the South Korean experiment. Follow-up results indicated that ease and pre-commitment messages resonated. They addressed the mental „overload” that often prevents people from acting on their intentions. „Ease and convenience reduce cognitive load and show that the task is very easy to do. This makes people want to execute the task immediately,” he says. „Another mental obstacle is procrastination. But reminding people of their goals through pre-commitment can motivate them.”

Implications for Marketing

Bhattacharya suggests that in P2P RBL contexts, financial stakes are high. This raises the bar for altruism or competitive status messages. This is a possible explanation for the findings. „This differs from other nudge studies on education or product choice. People are putting their own money on the line,” says Bhattacharya.

Reducing Mental Chaos

These findings align with Bhattacharya’s prior research on cognitive load in online advertising. They also connect to the negative impact of excessive emotionality in philanthropic chatbots. Together, they reinforce that winning wallet share requires eliminating mental chaos. Nudges should not add to it with unclear emotional appeals. „People have so many things happening in our days,” says Bhattacharya. „Their attention span is shorter. They are overloaded with multiple things at once. This creates mental inertia. A nudge should be a gentle push to help you overcome it.”