Personal traits and individual choices: Taking action in economic and non-economic decisions

In a large number of decisions, the option that does not require a specific action such as filling in a form is chosen frequently. It is a stylized fact that opt-in or opt-out designs for otherwise identical choices lead to vastly different outcomes. Choice options are chosen more frequently simply because they are the no-action alternative or default option. However, direct empirical evidence on the reasons for the popularity of defaults is scarce. We devised a special survey module for the Dutch DNB Household Survey to study potential explanations for default choices. We find that the popularity of the default option is related to different personal traits in economic and non-economic decisions. Financially literate individuals are more likely to take action and opt out the default option in economic decision-making. In non-economic decisions, procrastination increases the popularity of the default while individuals who care much about the opinion of others are more inclined to deviate from the default.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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