Default-Setting and Default Bias: Does the Choice Architect Matter?

David Freeman, Hanh Tong () and Lanny Zrill
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Hanh Tong: Simon Fraser University

Discussion Papers from Department of Economics, Simon Fraser University

Abstract: This paper studies how choices are influenced by the procedure used to select the default option. We develop an approach to test and compare default bias across different default-setting rules while controlling for heterogeneous preferences. We apply it to a within-subjects experimental design lottery choice experiment to compare four different default-setting rules: Random defaults, Custom defaults selected based on an individual's own past choices, Social defaults selected based on others’ choices, and Expert-set defaults. We find that the content of default-setting rules matters: default bias is present for all non-random default-setting rules we study, but not for randomly-set defaults.

Date: 2021-08
New Economics Papers: this item is included in nep-exp
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