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. 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. 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. There are two broad classes of defaults: mass defaults and personalised defaults. 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.