Information Asymmetries in Policy Defaults
David Tannenbaum, MA
Psychology & Social Behavior, UCI
Monday, October 18th
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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.