The Power of Defaults in our Everyday Lives (part 1)

If you are a human being like me, you have surely experienced the power of Defaults in your everyday life. In short, we talk about the default option that is provided to you as long as nothing else is happening to interrupt what you’re doing.

For example, you start watching your favorite TV series episodes and you tend to spend more time doing that action that you have planned to do. This way you spend valuable time from doing things that are more urgent, like cleaning your house or complete your work. Another example could be consuming snacks like chips and cashews, like there’s no tomorrow.

Have you ever wondered why this is happening or how you could find a solution when such issues arise?

Defaults/Default Options

The effect that takes place in these circumstances is the Defaults Effect. Based on Behavioral Economics, humans tend to prefer the easier and most accessible at the time choice. That makes us choose the default option a lot of time without even noticing!

Behavioral Economists and Policy Makers have a deep understanding of the power of defaults, that’s why they use them in many cases in order to provide a better Decision-Making for consumers and citizens.

Let’s dive into some successful applications of Nudging through Defaults:

Opt-in and Opt-out

It’s a fact that when people complete forms – in websites and documents – they tend not to check the default boxes which appear in the bottom of the form. That happens because they wanted to finish with the while process or they possibly didn’t pay enough attention to it. This phenomenon creates an issue to the creators of the form, who may want their customers to fill in that box and choose one more service or something similar.

The solution to that problem has been found by replacing choosing to enroll (opt-in) with choosing to dismiss (opt-out).

Let’s see a scenario, in which a website owner wants their readers to subscribe to the newsletter by checking a box in the end of a form.

Opt-in version 1

 Check the box in order to subscribe for our newsletter and be from the first ones to read our new blog posts!

Opt-in version 2 (Already checked box)

 Check the box in order to subscribe for our newsletter and be from the first ones to read our new blog posts!

Opt-out

 Check the box in order not to subscribe for our newsletter.

Research has shown that the second version of the opt-in method has better results than the first one, but the opt-out method is the best of all!

To be continued…

Chronis Lalas, Behavioral Economist and Founder of Nudge Unit Greece

~Explaining Behavioral Economics Simply~

References

Thaler, R. H., & Sunstein, C. (2008). Nudge: Improving decisions about health, wealth, and happiness. New Haven, CT: Yale University Press.