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  • 2022
  • Article
  • Behavioral Science & Policy

How to Choose a Default

By: John Beshears, Richard T. Mason and Shlomo Benartzi
  • Format:Print
  • | Pages:15
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Abstract

We have developed a model for setting a default when a population is choosing among ordered choices—that is, ones listed in ascending or descending order. A company, for instance, might want to set a default contribution rate that will increase employees’ average contributions to a retirement savings plan. A key input of the model is the distribution of latent options—the percentages of a population that select each available choice in the absence of a preset default. The model treats the default as an attraction point that causes some people to shift from their latent preference toward the default. It specifies the strength of each possible default’s pull on each latent option and thereby points policymakers to the default most likely to achieve a desired aim. We tested our model using data from field experiments relating to retirement savings. In addition to presenting the results, which support the model’s validity, we discuss how the model relates to prior empirical evidence on defaults.

Keywords

Nudge; Choice Architecture; Behavioral Economics; Behavioral Science; Default; Savings; Decision Choices and Conditions; Behavior; Motivation and Incentives

Citation

Beshears, John, Richard T. Mason, and Shlomo Benartzi. "How to Choose a Default." Behavioral Science & Policy 8, no. 1 (2022): 1–15.
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About The Author

John Beshears

Negotiation, Organizations & Markets
→More Publications

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  • A Randomized Trial of Behavioral Nudges Delivered through Text Messages to Increase Influenza Vaccination among Patients with an Upcoming Primary Care Visit By: Mitesh S. Patel, Katherine L. Milkman, Linnea Gandhi, Heather N. Graci, Dena Gromet, Hung Ho, Joseph S. Kay, Timothy W. Lee, Jake Rothschild, Modupe Akinola, John Beshears, Jonathan E. Bogard, Alison Buttenheim, Christopher Chabris, Gretchen B. Chapman, James J. Choi, Hengchen Dai, Craig R. Fox, Amir Goren, Matthew D. Hilchey, Jillian Hmurovic, Leslie John, Dean Karlan, Melanie Kim, David Laibson, Cait Lamberton, Brigitte C. Madrian, Michelle N. Meyer, Maria Modanu, Jimin Nam, Todd Rogers, Renante Rondina, Silvia Saccardo, Maheen Shermohammed, Dilip Soman, Jehan Sparks, Caleb Warren, Megan Weber, Ron Berman, Chalanda N. Evans, Seung Hyeong Lee, Christopher K. Snider, Eli Tsukayama, Christophe Van den Bulte, Kevin G. Volpp and Angela L. Duckworth
  • Automating Short-Term Payroll Savings: Initial Evidence from a Large U.K. Experiment By: Sarah Holmes Berk, John Beshears, James J. Choi and David Laibson
  • Present Bias Causes and Then Dissipates Auto-enrollment Savings Effects By: John Beshears, James J. Choi, David Laibson and Peter Maxted
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