Deciding by default: Lessons from behavioural economics

Via Evgeny Morozov on twitter, below is a talk given by Cass Sunstein at the Woodrow Wilson School at Princeton. He talks about the potential for default rules in green energy, organ donation, pension saving, internet privacy, labour contracts, television programming, insurance contracts, bank overdraft fees and other areas; the idea of choice architecture; the triptych of default rules; the future of personalised default rules; explanations for default rules in terms of inertia, perception of defaults as normative advice, trust in the person designing the default, reference points and loss aversion. He gives examples (such as women changing their names after marriage) where default rules don't stick, highly socially salient situations or situations where institutions put effort in switching people from defaults. The idea of personalised default rules is a very important one and worthy of discussion in policy and in classes. "Personalised default rules are the wave of the future and rightly so notwithstanding the evident risks".

  

Some links:

Woodrow Wilson School Princeton 

OIRA Website 

Cass Sunstein's Harvard website 

Impersonal Default Rules vs. Active Choices vs. Personalized Default Rules: A Triptych

Nudge: Improving Decisions About Health, Wealth and Happiness

Richard Thaler Youtube talk on Smart Disclosure

A prior reading list from this blog on behavioural policy readings.