Monday, October 18, 2010

Information Asymmetries in Policy Defaults

David Tannenbaum
David Tannenbaum, MA
Psychology & Social Behavior, UCI

Monday, October 18th
SBSG 1517

For more information about the speaker, click here
To read the abstract, click 'read more' below

In the absence of individual choice, policymakers must choose between a passive default that does nothing and a pro-active default that does (non-enrollment and auto-enrollment defaults, respectively). Both types of defaults have important and pervasive effects on individual decisions, but auto-enrollment defaults appear to be “stickier” than non-enrollment defaults. The current studies explain the differential influence of defaults by appealing to their informational value — auto-enrollment defaults send strong signals about policymakers’ reasons for acting, while non-enrollment defaults are viewed as relatively uninformative. As a result, auto-enrollment defaults are especially likely to provide additional information relevant to individual choice, and this additional information can influence default decisions.