Defaults and Attention: The Drop Out Effect

Andrew Caplin and Daniel Martin

No 17988, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: When choice options are complex, policy makers may seek to reduce decision making errors by making a high quality option the default. We show that this positive effect is at risk because such a policy creates incentives for decision makers to "drop out" by paying no attention to the decision and accepting the default sight unseen. Using decision time as a proxy for attention, we confirm the importance of this effect in an experimental setting. A key challenge for policy makers is to measure, and if possible mitigate, such drop out behavior in the field.

JEL-codes: D01 D03 D04 D82 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-exp
Note: PE
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Citations: View citations in EconPapers (13)

Published as Andrew Caplin & Daniel Martin, 2017. "Defaults and Attention: The Drop Out Effect," Revue économique, vol 68(5).

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