Partitioning Default Effects: Why People Choose Not to Choose

33 Pages Posted: 14 Jul 2009 Last revised: 5 Sep 2012

Isaac M. Dinner

University of North Carolina - Chapel Hill

Eric J. Johnson

Columbia Business School - Marketing

Daniel G. Goldstein

Microsoft Research New York City; London Business School

Kaiya Liu

University of South Dakota - School of Business

Date Written: November 28, 2010

Abstract

Default options exert an influence in areas as varied as retirement program design, organ donation policy, and consumer choice. Past research has offered potential reasons why no-action defaults matter: (i) effort, (ii) implied endorsement, and (iii) reference dependence. The first two of these explanations have been experimentally demonstrated, but the latter has received far less attention. In three experiments we produce default effects and demonstrate that reference dependence can play a major role in their effectiveness. The experimental context involves two environmentally-consequential alternatives: cheap, inefficient incandescent lightbulbs, and expensive, efficient compact fluorescent bulbs. Within this context we also measure the impact of each potential rationale for a default effect. We find that the queries formulated by defaults can produce differences in constructed preferences and further that manipulating queries can also mitigate default effects.

Keywords: defaults, query theory, decision making, preference construction

Suggested Citation

Dinner, Isaac M. and Johnson, Eric J. and Goldstein, Daniel G. and Liu, Kaiya, Partitioning Default Effects: Why People Choose Not to Choose (November 28, 2010). Available at SSRN: https://ssrn.com/abstract=1352488 or http://dx.doi.org/10.2139/ssrn.1352488

Isaac M. Dinner (Contact Author)

University of North Carolina - Chapel Hill ( email )

Chapel Hill, NC 27599
United States

Eric J. Johnson

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

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

Kaiya Liu

University of South Dakota - School of Business ( email )

414 East Clark Street
Vermillion, SD 57069
United States

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