Defaults and Attention: The Drop Out Effect

35 Pages Posted: 13 Apr 2012 Last revised: 25 Feb 2021

Date Written: April 2012

Abstract

When choice options are complex, policy makers may seek to reduce decision making errors by making a high quality option the default. We show that this positive effect is at risk because such a policy creates incentives for decision makers to "drop out" by paying no attention to the decision and accepting the default sight unseen. Using decision time as a proxy for attention, we confirm the importance of this effect in an experimental setting. A key challenge for policy makers is to measure, and if possible mitigate, such drop out behavior in the field.

Suggested Citation

Caplin, Andrew and Martin, Daniel, Defaults and Attention: The Drop Out Effect (April 2012). NBER Working Paper No. w17988, Available at SSRN: https://ssrn.com/abstract=2039206

Andrew Caplin (Contact Author)

New York University (NYU) - Department of Economics ( email )

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HOME PAGE: http://www.econ.nyu.edu/user/caplina/

National Bureau of Economic Research (NBER)

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Daniel Martin

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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