### 날짜 : 2024-03-25 14:37 ### 주제 : Default Effects and Nudging #economics ---- ### Default Effects and Nudging The concepts of "default effects" and "nudging" are grounded in the recognition that the way choices are presented to individuals can have a profound impact on their decision-making. These concepts arise from the field of behavioral economics, which takes into account how various psychological, social, and emotional factors influence economic decisions. #### Default Effects The default effect refers to the tendency for individuals to go along with a pre-set option when faced with a choice, whether out of convenience, limited cognitive bandwidth, or lack of a strong preference. Defaults can be very powerful because they serve as a kind of implicit recommendation; if this is the option automatically chosen for me, it must be a generally good choice. In many cases, people assume that a default is suggesting the norm or the optimal decision. Defaults leverage the status quo bias, a preference for the current state of affairs. Changing from what is seen as the standard option requires mental effort and, in some cases, may invoke loss aversion (people's tendency to want to avoid losses more than they want to achieve gains). Examples of default effects include: - **Opt-in vs. opt-out systems**: For organ donation, countries that have an opt-out system (you are a donor by default) see much higher donation rates than countries with an opt-in system. - **Pre-selected options in online purchasing**: When buying a product online, additional items may be pre-selected to add to your cart (like a warranty extension), leading more people to purchase these add-ons. #### Nudging A nudge is a concept popularized by Cass Sunstein and Nobel laureate Richard H. Thaler. It refers to any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not. Nudging is built on the idea that by changing the way choices are presented, one can influence behavior in a predictable way. For instance, without eliminating choices or significantly changing financial incentives, you can nudge people towards healthier food choices by placing those foods at eye level on the supermarket shelf or having them be the default choice on a menu. Examples of nudging include: - **Retirement saving plans**: Automatically enrolling employees in retirement saving plans, with the option for them to opt out, can significantly increase savings rates compared to requiring employees to opt in. - **Public health**: Placing healthier food options at cafeteria checkouts can nudge people to choose these options more often. - **Sustainability**: Defaulting to double-sided printing in office settings can reduce paper usage without prohibiting the choice of single-sided printing. #### Effectiveness and Ethics The effectiveness of nudges can be substantial, often achieving the desired behavior change at a low cost and in a way that preserves individual freedom of choice. However, there are also ethical considerations: nudges must be transparent and not mislead people. The people being nudged should benefit from the nudge, according to their own preferences. For this reason, the concept of "[[Libertarian Paternalism]]" is often associated with nudging. It's "libertarian" because it preserves freedom of choice, and "paternalistic" because it guides people in a direction that will improve their lives by their own standards. #### Designing Effective Nudges Designing an effective nudge requires a detailed understanding of behavioral science. It also requires ethical consideration to ensure that nudges empower people rather than manipulate them. Thaler and Sunstein emphasize the importance of nudging for good—helping individuals make choices that they themselves would consider beneficial. As governments and organizations increasingly rely on behaviorally informed policies, the effective and ethical use of defaults and nudges to improve public welfare remains a valuable tool. The default effect and nudging continue to be extensively studied and applied across numerous domains, including healthcare, personal finance, environmental protection, and general public policy.