Default effect

The default effect, a concept within the study of nudge theory, explains the tendency for an agent to generally accept the default option in a strategic interaction.^[1] The default option is the course of action that the agent, or chooser, will obtain if he or she does not specify a particular course of action.^[2] The default effect has broad applications for firms attempting to 'nudge' their customers in the direction of the firm's optimal outcome. Experiments and observational studies show that making an option a default increases the likelihood that such an option is chosen.^[3] There are two broad classes of defaults: mass defaults and personalised defaults.^[4] Setting or changing defaults has been proposed and applied by firms as an effective way of influencing behaviour—for example, with respect to setting air-conditioner temperature settings, giving consent to receive e-mail marketing, or automatic subscription renewals.