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The default option

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Many decisions we take every day have a default option, whether we recognise it or not. Defaults are the options that are pre-selected if an individual does not make an active choice.

Defaults exert influence as individuals regularly accept whatever the default setting is, even if it has significant consequences. Defaults are one of the most robust findings for changing behaviour, though in some cases they are difficult to see because we are so used to the status quo.

One of the most well-established applications of defaults is to make certain programs opt-out rather than opt-in, so people are by default enrolled. This has been used in organ donation, which can be a huge problem as hospitals frequently find themselves with a shortage of organs to help patients in need. Actual donations are low, despite the fact that the vast majority of people say they favour organ donation.

In some countries, such as Denmark and Germany, opt-in policies are used and people have to consent explicitly to be organ donors. In other countries such as Hungary and Sweden, opt-out policies are used, assuming that people are organ donors unless they register not to be.

As shown in the above figure from Johnson and Goldstein (2003), the difference in consent rates is enormous between the opt-in countries (yellow) and the opt-out countries (blue). People simply go with the flow and accept the default option, whether it is to donate their organs or not. Crucially, changing the default does not take away anyone’s choice: in every country in the figure, people can choose to be organ donors or not.

This data is observational, and it could simply be that the countries have different cultures and attitudes, which are reflected in their policy. Johnson and Goldstein (2003) also run a randomised experiment to test the impact of defaults, finding much higher consent rates for participants given the choice to opt-out rather than opt-in.

Changing defaults can increase organ donation and save lives, all at a low cost and while respecting peoples’ freedom to choose, an idea known as libertarian paternalism. Defaults are one of the biggest successes of libertarian paternalism.

There are numerous other ways to use opt-out rules and in the original book Nudge (itself a snappier name for libertarian paternalism) by Thaler and Sunstein (2008), they discuss saving for pensions, which governments and companies have increasingly made opt-out so that people save money as a default. We will discuss these in much more depth later in the week.

Default options have also been used for the notoriously complicated healthcare plans in the US. By having an expert design a sensible plan as a default, along with a few other options, the enormous complexity of the task is reduced and the individual is able to navigate a previously taxing decision without much thought. However, they do have to be sure the default has been designed with their best interests in mind, another topic that will come up later in the week.

Many public policy choices have a no-action default imposed when an individual fails to make a decision. This default setting is often selected through natural ordering or convenience, rather than a desire to maximise benefits for citizens. Structuring the default option to maximise benefits for citizens can influence behaviour without restricting individual choice.

Over to you

Defaults seem to be massively successful. Can you think of an example of a default that you have followed? It could be in health, education, savings, employment, holidays, food, or any other area of your life—defaults are everywhere.

References

1. Johnson EJ, Goldstein D. Do defaults save lives?.
2. Thaler RH, Sunstein CR. Nudge: Improving decisions about health, wealth, and happiness.

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