Work

Communicating through Defaults

Year: 2022

Type: article

Abstract: We report the results of two laboratory experiments and a representative survey that investigate how default effects are shaped by information asymmetries and strategic incentives. We document that defaults are more informative when the interests of default setters and decision makers are more closely aligned. Decision makers’ propensity to accept defaults depends, both, on the alignment of interests and the quality of their information. In a second experiment, we demonstrate that decision makers are more likely to follow defaults than to accept (equally informative) advice. Complementary evidence from a representative survey underlines that consumers commonly perceive defaults as being set strategically.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_01260

Authors: Steffen Altmann, Armin Falk, Andreas Grunewald

Institutions: University of Copenhagen, University of Würzburg, University of Bonn, BRIQ Institute on Behavior and Inequality, Frankfurt School of Finance & Management

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: Volkswagen Foundation

OpenAlex ID: W4309650820

FWCI: 1.634

Cites: 46

Cited by: 13

Related to: 10