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Power of the default

Behavioral economics is becoming a major component of LIRNEasia’s toolkit. The discussion below refers to the decision architectures that appear to keep the money flowing into Google.

But most people, of course, never make that single click. Defaults win.

The role of defaults in steering decisions is by no means confined to the online world. For behavioral economists, psychologists and marketers, defaults are part of a rich field of study that explores “decision architecture” — how a choice is presented or framed. The field has been popularized by the 2008 book “Nudge,” by Richard H. Thaler, an economist at the University of Chicago and a frequent contributor to the Sunday Business section, and Cass R. Sunstein, a Harvard Law School professor who is now on leave and is working for the Obama administration. Nudges are default choices.

In decision-making, examples of the default preference abound: Workers are far more likely to save in retirement plans if enrollment is the automatic option. And the percentage of pregnant women tested for H.I.V. in some African nations where AIDS is widespread has surged since the test became a regular prenatal procedure and women had to opt out if they didn’t want it.

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