Saturday, November 15, 2008

Daniel Goldstein on "smart defaults"

The paper below is a very clear account of many of the important issues surrounding the use of defaults in a wide variety of settings.

Smart Defaults: From Hidden Persuaders to Adaptive Helpers

Defaults have been shown to have such powerful and unrecognized effects on consumer behavior that in some settings they may be considered "hidden persuaders". While much attention has been paid to the beneficial consequences of defaults, we discuss how, in certain circumstances, defaults can be chosen to disadvantage consumers. This paper looks at defaults from the perspective of consumer welfare, consumer autonomy, and marketing ethics. It identifies three theoretical causes of default effects - implied endorsement, cognitive biases, and effort - to guide thought on the issues posed for consumer autonomy and welfare. We propose the concept of "smart defaults" and "adaptive defaults" as welfare-enhancing alternatives, in addition to other remedies, and conclude with implications for marketers, consumers, policymakers and researchers.

Available from the SSRN here

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