Active Choice, Implicit Defaults, and the Incentive to Choose

John Beshears, James Choi, David Laibson and Brigitte Madrian

No 25473, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy pick-up a requirement for insurance eligibility. The program introduces an implicit default for those who don’t make an active choice: pharmacy pick-up without insurance subsidies. Under this program, 42% of eligible employees actively choose home delivery, 39% actively choose pharmacy pick-up, and 19% make no active choice and are assigned the implicit default. Individuals who financially benefit most from home delivery are more likely to choose it. Those who benefit least from insurance subsidies are more likely to make no active choice and lose those subsidies. The implicit default incentivizes people to make an active choice, thereby playing a key role in choice architecture.

JEL-codes: D03 D04 D91 I13 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-ias
Note: AG EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as John Beshears & James J. Choi & David Laibson & Brigitte C. Madrian, 2019. "Active choice, implicit defaults, and the incentive to choose," Organizational Behavior and Human Decision Processes, .

Downloads: (external link)
http://www.nber.org/papers/w25473.pdf (application/pdf)

Related works:
Journal Article: Active choice, implicit defaults, and the incentive to choose (2021)
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:nbr:nberwo:25473

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25473

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().