Open Default Nudges

Open Defaults

Our society has a lot of defaults, and for many of us, we only opt out of the default in a narrow set of circumstances. Whether it is our mode of travel, how we pay for goods, or the type of health insurance plan we are enrolled in, the default option makes a big difference in our lives. Actors within our political and economic systems know this, and the choice of default can matter a lot to individual actors, political groups, and companies. Consequentially, what default is selected, and what story we tell about the default, is a constant point of argument and debate in our country.

 

In their book Nudge, Cass Sunstein and Richard Thaler discuss the importance of nudges and the ways that responsible choice architects should think about them. Choice architects may face pressure to select a default option that in one way or another benefits them personally or benefits the group or ideology they identify with. A state government may favor a default Medicaid option that is confusing and hard for individuals to use, meaning that fewer people will access services, and the state won’t have to pay as much for medical services for low income individuals. A corporate HR representative might feel pressured from a boss to have the default retirement savings rate for employees set at 2%, knowing that the company will spend less through retirement savings matching if the rate is lower.

 

But these types of defaults are not in the best interest of individuals. A health plan that is easy to use and facilitates access to necessary medical care is clearly in the best interest of the individual, but it may cost more for the government agency or corporation sponsoring the plan. A retirement plan that helps save above the rate of inflation is also clearly in the best interest of the individual, but might be more costly to a company’s bottom line.

 

As a guide for setting defaults, following with previous advice of ensuring that deliberate nudges employed by governments or corporations can survive open transparency, Sunstein and Thaler write, “The same conclusion holds for legal default rules. If government alters such rules – to encourage organ donation or reduce discrimination – it should not be secretive about what it is doing.”

 

The defaults we chose, and the reasons we select defaults should be open and transparent. If a choice architect cannot defend a default choice, then they should set an alternative default that can be defended in the open. Defaults that clearly benefit the choice architect or their interests at the expense of the individual making (or failing to make) a choice should be excluded. It is important to note that this means that choice architects have to actively make a decision with the default. Setting the default for a retirement savings plan if an individual never makes a selection to 0 is not in the best interest of the individual. An argument could be made that the choice architect attempted to remove themselves from the choice setting as much as possible by not providing a default, but that is still a choice, and will leave some people worse off than if the choice architect had selected a more defensible choice. Choosing not to set a default can be as indefensible as selecting a self-serving default.
Default Choices

More On Default Choices

In many decision situation there is a default choice. Many online forms already have a bubble selected as you scroll through, there are many opt-out clauses in hospital disclosures, and when you go to sign-up for a social media platform there are pre-set security and information sharing agreements and settings. These defaults can matter a lot, and sometimes they matter much more to someone other than the recipient of the default. As Richard Thaler and Cass Sunstein write in Nudge, “note that not all defaults are selected to make the chooser’s life easier or better.”

 

Default selections are nudges because they shape the easiest choice path, what Sunstein and Thaler refer to as the path of least resistance. When a default has already been selected, the chooser doesn’t have to make a decision. Their non-decision still results in a choice being selected. The default is often the most popular option, even if it isn’t the best choice for anyone, because there is some cost to switching away. The cost is usually only time and effort, and normally a minimal amount of time and effort, but still, it is a cost that people won’t pay.

 

“If, for a given choice,” write Sunstein and Thaler, “there is a default option – an option that will obtain if the chooser does nothing – then we can expect a large number of people to end up with that option, whether or not it is good for them.”

 

Most of us probably agree that it isn’t in our best interest to allow Facebook to gather massive amounts of information about us to be sold to advertisers and political campaigns. However, the default settings for Facebook require us to opt-out of having our data sold. The process for finding the settings and opting out of targeted advertisements and having our data sold is hard to find, and the exact spot in the settings menu changes periodically. We lose time trying to find the right spots to check to get out of the default, and we can become frustrated if we can’t find the settings we are looking for. As a result, many people never change away from the data sharing default.

 

The Facebook example is a fairly nefarious use of defaults, but using defaults as nudges can be positive for individuals and societies as well. In 2019 the state I live in, Nevada, approved a new law which allows people to register to vote when completing anything they need at the DMV. By default, individuals over 18 who are eligible to vote are asked if they would like to register or update their registration. People don’t have to ask to update their voter registration, they don’t have to track down a website to update voter information, and they don’t have to hope someone approaches them in a parking lot with voter registration forms, it is a default option while doing regular paperwork at the DMV. Many states have a similar process with becoming an organ donor, where registering as an organ donor is the default option when applying for a state issued identification, requiring people to opt out of organ donor programs rather than opt in. States and countries with such systems have far more organ donors than states that don’t include people by default.

 

The path of least resistance created by nudges is important to consider. It can be a helpful way to encourage people to make decisions that are good for them and for society. At the same time, defaults can take advantage of laziness or forgetfulness. When we are not directly informed of the defaults that are being applied to us, we can end up in situations like the Facebook data sharing example above. As a result, questions about the default choice are often contentious, especially when a company’s business model requires a default that is not in the best interest of most people, or when a selected default can have political or moral dimensions.
Defaults Matter

Defaults Matter

I will discuss defaults in depth when I begin writing about Nudge by Cass Sunstein and Richard Thaler, but it is important to think about our responses to default choices in the context of Daniel Kahneman’s research in Thinking Fast and Slow. Kahneman argues that we can think of our brains as having two different operating systems. System 1 is the fast and automatic system. It scans the environment, takes in the salient information around us, filters out the unimportant information, and makes quick judgements without putting too much power into the thinking process. System 2 is where System 1 sends the more difficult problems that it can’t handle on its own. System 1 takes the information it can absorb, packages that information with a particular reference frame, and sends it to System 2 for slower, more energy intensive thought. And this is where the defaults matter.

 

System 1 will fall back on the default when System 2 doesn’t want to engage with a problem. Because System 2 is energy intensive we only use it when we need to (like when we are cooking a new recipe, trying to complete our taxes, or trying to win scrabble). For most decisions, we can just fall back on the default and be fine. Instead of making a tough decision, we can rely on simple standard choices without having to consider alternatives or justify why we made a particular choice. Kahneman shows how powerful the default can be by examining the rates at which people register to be organ donors in different states and countries. He writes, “The best single predictor of whether or not people will donate their organs is the designation of the default option that will be adopted without having to check a box.”

 

For most decisions and thoughts, System 1 scans the environment and makes a quick judgment as to whether or not we need to do anything. If it determines that there is a need for more comprehensive thought, then it engages System 2, but it only packages the information it could take in during its quick scan. So while our System 2 is powerful and can work through lots of information, it can only work on the information from System 1’s quick scan. That quick scan includes the default option, but doesn’t include the various other options that were not immediately available. This can create anchoring effects and limit the categories we consider for possible alternatives from the default. When someone yells an answer in Family Feud and everyone else comes up with similar answers in the same category, we are seeing people anchor to a default category for responses. When your company enrolls you in a 401K and automatically sets your contribution limit, any change that you make is likely to be a small deviation from that preset level, you are not very likely to change all the way to 0 or make a huge deviation from that default anchor. Indeed, if you have ever been stopped in freeway traffic and only after stopping realized that you could have taken numerous different routes to avoid the traffic jam, you have seen how limiting our lives can be when we stick to a simple default and fail to consider the various other possibilities available to us.

 

The reason that defaults matter so much is because we are lazy, because System 2 doesn’t do much work if it doesn’t have to, and because System 2 gets a limited set of information from System 1. Our perspectives, opinions, and the world of possibilities available to us is anchored around the default. When I write about Nudge I will get more in depth with thinking about the importance of various defaults in different areas of our lives.

Unsure

In my last post, I wrote about how the brain handles danger. When we sense danger, we become less creative, more prone to seeing the world as black and white, and we don’t engage our conscious brain as thoroughly as we should. Our brains evolved this way in small groups over thousands of years because it helped us survive in a dangerous and unpredictable world. Today, however, technology and society have changed the human experience and the danger we face is no longer the same. But nevertheless, our brain still holds on to its evolved danger response.

 

In The Coaching Habit, Michael Bungay Stanier explains that we are biased toward danger thinking. Our brain approaches new situations with our danger sensors turned up. As Bungay Stanier writes, “In other words, if you’re not sure about a situation, you’ll default to reading it as unsafe. And start backing away.”

 

As in the last post, I don’t want to focus for what this means for ourselves directly. I would rather look at how recognizing this should change the way we with those whom we work with, live with, and encounter on a daily basis. In any given situation that is slightly unfamiliar, we are going to default to danger thinking. By focusing on others and understanding the danger that everyone has evolved to feel when taking new steps and taking risks, we can work to better support them and help create an environment that is less dangerous.

 

Within companies, our efforts to boost our egos and dominate a space to be the smartest, most capable, and most important member of the organization cause other people to feel danger. We increase the threat that they may feel and as a consequence, people begin backing away and stop thinking creatively. If instead, we focus on the best outcomes for the team and the company, and we try to minimize the danger and risk that other people experience, we can get more conscious and courageous thinking from the people around us, and ultimately we can have a better and more diverse organization that thinks in new and innovate ways. We can still create environments where competition helps push people to be their best and put forward their best ideas, but the space in which they take risks and put themselves forward needs to be safe to allow diverse views and opinions to be discussed and experimented with. Ultimately, we must take some ownership ourselves for the danger responses in other people, we cannot simply criticize another for feeling threatened and backing away. After all, our brains evolved for this to be our default. To be strong leaders and coaches, we must understand how the brain works and reacts to the world, and we must do our part daily to reduce the danger and threat that others feel and that we push out into the world.