The Power of Defaults

The default effect is the phenomenon where making an option the default among a set of choices increases the likelihood of it being chosen.

Where does the default effect come from?

Risk and Loss Aversion

Changing of Norms

The good and the bad

Applying the default effect

  • You can offer people multiple options, but if there is a default option the vast majority will likely choose that.
  • If you really want to know what people will choose among a certain set of options, then do not set a default. This forces them to actually make a choice.
  • The likelihood of switching away from a default is inversely proportional to the effort required to do so. By increasing the friction to “switch”, you ensure the default is stuck to more often.
  • The more complicated the set of options are, the more likely the person making the choice will stick with the default.
  • The more someone trusts the person offering the choices who has chosen the default, the more likely they are to stick with the default.
  • Want to go to a specific restaurant: ask them “I was thinking restaurant A. Does that work?” (default with friction to get more options)
  • Are indifferent between a few choices and want them to make a decision: ask them “how about restaurant A or restaurant B?” (no default)
  • Want them to choose a place: ask them “how about McDonalds?” (set a bad default and anchor them — they’ll do the work of offering up alternatives now because even the friction of finding new options themselves is worth the effort for them of switching from McDonalds³)

Footnotes

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Curious about technology, economics, and business. You can find me on twitter (@tanayj) or substack: https://tanay.substack.com/

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Tanay Jaipuria

Tanay Jaipuria

Curious about technology, economics, and business. You can find me on twitter (@tanayj) or substack: https://tanay.substack.com/

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