Here, employees are automatically opted into a scheme by their employer, although they have complete freedom to opt out if they so choose. Of course, one of the most well-known applications of defaults is in the area of enrolment into retirement savings schemes and pensions. However, when they had to take action to cancel, just 36.4% did so. When subscriptions were automatically cancelled by default, 99.8% of customers accepted and cancelled their subscription. When US telemarketing firm Suntasia faced a federal lawsuit after charging hundreds of thousands of customers an average of $239 each for worthless subscriptions, a team of researchers ran an experiment to see which method of cancelling subscriptions worked best. Ī 2017 study also highlights just how influential defaults - in the form of automatic subscription renewals - can be. For example, in 2016 Google paid Apple $1 billion to remain the default search engine on the iPhone, also paying to remain the default on popular web browsers. Companies often realise the immense value of being the default choice. In fact, on speaking to Microsoft, some of the settings were not recommendations at all, but developers waiting for further guidance before making a setting the default. When he interviewed a sample of the users, they all told him the same thing: they assumed Microsoft had delivered it with certain settings for a reason, therefore who were they to change it? “Microsoft must know what they are doing” several of the participants told him. More than 95% had kept the settings in the exact configuration as when the programme was installed. He analysed the settings of people’s software and applications and found that less than 5% of the users he surveyed had changed any settings at all. Findings from research by Jared Spool also found a high degree of status quo bias in people’s computer settings. Similarly, in a recent UK survey, 82% of people said they had never changed their Wifi router's default administrative password. Research by tech expert, Nir Eyal, has found that two thirds of smartphone owners never change their notification settings, usually defaulted to ‘on’ they stick to the default settings. Just how powerful is illustrated in these next examples. Default options thus act as powerful nudges.” Thaler commented, “The combination of loss aversion with mindless choosing implies that if an option is designated as the “default”, it will attract a large market share. Richard Thaler and Cass Sunstein drew considerable attention to the concept of defaults in their 2008 bestselling book ‘Nudge’, classifying defaults as one of six important types of nudge or choice architecture. The power of defaults in shaping behaviour Thirdly, we explore new findings about potential drawbacks or what nuances might make them more or less effective- the contexts, choice architecture or characteristics of people - that might shape whether a default is accepted or not, particularly in the longer term. Secondly, we look at some cases where they have not been successful, to see what we can learn. Firstly, we summarise just how powerful default settings can be and look at four simple rules or conditions potentially explaining why they are often so effective in influencing behaviour. In this article, the second in our series on the new frontiers of behavioural science, we look into the concept of default effects more closely and delve into the latest research and findings to better understand the concept - how we can change or create new default settings. A very simple example is the default (factory) password setting for our mobile phones or our voicemail, which an astoundingly high proportion of people never get around to changing. We accept the status quo and go with the flow, without considering other options or investigating further. By defaults, we mean that when people are presented with default options already set, or are automatically enrolled into something, they tend to accept them. The concept of creating or changing default settings is possibly one of the most powerful ‘nudges’ in any behavioural scientist’s ‘toolbox’ - one of the surest ways of changing people’s behaviour. Whether the area involves savings behavior, poverty reduction, or the environment, default rules have had significant effects on outcomes.” “Of all of the tools in the choice architect’s repertoire, default rules may be the most promising they are almost certainly the most discussed.
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