EconPapers    
Economics at your fingertips  
 

Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan

Joshua Blumenstock, Michael Callen and Tarek Ghani

American Economic Review, 2018, vol. 108, issue 10, 2868-2901

Abstract: We report on an experiment examining why default options impact behavior. By randomly assigning employees to different varieties of a salary-linked savings account, we find that default enrollment increases participation by 40 percentage points—an effect equivalent to providing a 50% matching incentive. We then use a series of experimental interventions to differentiate between explanations for the default effect, which we conclude is driven largely by present-biased preferences and the cognitive cost of thinking through different savings scenarios. Default assignment also changes employees' attitudes toward saving, and makes them more likely to actively decide to save after the study concludes.

JEL-codes: C93 D14 D91 O12 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20171676
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (57)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20171676 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... YRXi95PG7SlyFZZeSaaE (application/zip)
https://www.aeaweb.org/articles/attachments?retrie ... eMdpbnURTAwtX-BtYvBA (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... 2WPwdwSBvu8x97lh40PD (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Why do defaults affect behavior? Experimental evidence from Afghanistan (2018) Downloads
Working Paper: Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan (2017) Downloads
Working Paper: Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:108:y:2018:i:10:p:2868-2901

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2025-03-22
Handle: RePEc:aea:aecrev:v:108:y:2018:i:10:p:2868-2901