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Smart Defaults: From Hidden Persuaders to Adaptive Helpers

Posted: 6 Apr 2008 Last revised: 19 Feb 2013

N. Craig Smith

INSEAD

Daniel G. Goldstein

Microsoft Research New York City; London Business School

Eric J. Johnson

Columbia Business School - Marketing

Date Written: February 3, 2009

Abstract

Defaults have such powerful, pervasive and unrecognized effects on consumer behavior that in some settings they may be considered 'hidden persuaders'. Looking at defaults from the perspective of consumer welfare, consumer autonomy and marketing ethics, this paper shows that ignoring defaults is not an option. It identifies three theoretical causes of default effects-implied endorsement, cognitive biases, and effort-to guide thought on the appropriate marketer response to the issues posed for consumer autonomy and welfare. We propose the concepts of "smart defaults" and "adaptive defaults" as welfare-enhancing and market-oriented alternatives to the current practice of generally ignoring default effects, in addition to other remedies. Our analysis highlights how an ethical market orientation would consider the process of consumer decision making as well as its outcomes: marketers bear responsibility for consumer buying mistakes arising from the marketer's inept neglect or misuse of defaults. As well as recommendations for marketing practice, we also identify policymaker and research implications of defaults and consider, more broadly, the ethics of using techniques that influence consumer choice without consumer awareness.

Keywords: Default Effects, Marketing Ethics, Consumer Choice, Consumer Welfare, Consumer Autonomy

Suggested Citation

Smith, N. Craig and Goldstein, Daniel G. and Johnson, Eric J., Smart Defaults: From Hidden Persuaders to Adaptive Helpers (February 3, 2009). INSEAD Business School Research Paper No. 2009/03/ISIC. Available at SSRN: https://ssrn.com/abstract=1116650 or http://dx.doi.org/10.2139/ssrn.1116650

N. Craig Smith (Contact Author)

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Daniel G. Goldstein

Microsoft Research New York City ( email )

641 Avenue of Americas
New York, NY 10011
United States

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
+44 0 20 7000 8611 (Phone)
+44 0 20 7000 8601 (Fax)

HOME PAGE: http://www.dangoldstein.com

Eric J. Johnson

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

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