How do defaults affect information acquisition and processing?

Abstract

We investigate whether default nudges affect the willingness of decision-makers to acquire and process information about the choice options in a discrete choice situation. In an online experiment, where about 2,300 participants choose between two donation options worth $100, we vary the availability of information on the options and the presence of a default or, more generally, a preselected option. We find that the presence of a preselected option – self-selected or exogenously determined as a default nudge – induces decision-makers to remain ignorant, as they request less in formation on the choice options when given the option to do so. Moreover, we show that the presence of such a status quo in the form of a preselected option makes participants more likely to disregard available information than in the absence of a preselected option. Our results cannot be explained by rational inattention or laziness. These findings show that default nudges may not be as innocent as often assumed, and more generally, they highlight the need for choice architects, regulators, legislation, and management to take the consequences of a preselected option, such as defaults and own choices made earlier in time, on information acquisition and processing into account when considering the design of a decision situation.