Choice or no choice: What explains the attractiveness of default options

The default option in individual decision making has proved to be a major attractor in a large number of situations. Yet, direct empirical evidence on the reasons for the importance of thedefault is still lacking. We have devised a new module for the Dutch DNB Household Survey and the US RAND American Life Panel to identify potential explanations for default choices and to provide empirical evidence on their relative importance for retirement savings, organdonation, voting, having a will, and no-consent decisions in marketing. The use of survey data allows us to study the behavior of the entire population and to control for a rich set of personal characteristics, as well as for labor market status, income, and wealth. Our findings confirm that the default option plays a pivotal role in individual decision making in the Netherlands as well as in the US. Moreover, choice behavior seems to be driven by differentreasons across different situations in both countries, with a particularly strong role for procrastination and financial illiteracy. In addition, we find an important role for social normsand peer effects explaining the deviation from default options in the Dutch data.