Passive Choices and Cognitive Spillovers

Steffen Altmann, Andreas Grunewald () and Jonas Radbruch ()
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Andreas Grunewald: Goethe University Frankfurt

No 12337, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Passive behavior is ubiquitous - even when facing various alternatives to choose from, people commonly fail to take decisions. This paper provides evidence on the cognitive foundations of such "passive choices" and studies implications for policies that encourage active decision-making. In an experiment designed to study passive behavior, we document three main results. First, we demonstrate that scarcity of cognitive resources leads to passive behavior. Second, policies that encourage active choice succeed in reducing passivity and improve decisions in the targeted domain. Third, however, these benefits of choice-promoting policies come at the cost of negative cognitive spillovers to other domains.

Keywords: scarcity; default options; cognitive resources; passivity; active decision-making; spillover effects (search for similar items in EconPapers)
JEL-codes: C91 D01 D04 D91 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2019-05
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-neu
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Citations: View citations in EconPapers (2)

Published - published as 'Interventions and Cognitive Spillovers' in: Review of Economic Studies , 2022, 89 (5), 2293-2328

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