Optimal default options

B. Douglas Bernheim and Jonas Mueller-Gastell

Journal of Public Economics, 2024, vol. 237, issue C

Abstract: Previous studies of optimal default options demonstrate that either opt-out minimization or maximization is optimal under restrictive conditions. We obtain a general characterization of the solution by studying optimal defaults when one of the problem’s parameters approaches a limiting value. We interpret these “asymptotic optima” as approximate optima for non-limiting cases and justify this interpretation through numerical simulations. When the designer and choosers agree about the activity’s value, simple forms of weighted opt-out minimization are asymptotically optimal. Additional results encompass Pigouvian fees, normative ambiguity, and cases in which the designer and choosers disagree about the activity’s value.

Keywords: Default effects; Optimal defaults; Personal saving; Pension policy; Behavioral public economics (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:237:y:2024:i:c:s0047272724001397

DOI: 10.1016/j.jpubeco.2024.105203

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