default rules

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1) A safe that locks away tempting objects for between two minutes and four days. Hat tip: Thomas Sander.

2) Kids like Frosted Flakes because of Tony the Tiger.

3) “Microsoft built its browser so that users must deliberately turn on privacy settings every time they start up the software.

4) Cigarette packaging ideas for discouraging smoking. Hat tip: Dan Greenberg.

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Faced with restaurant manager churn, McDonald’s decided to offer a generous company match to its 401k plans. Automatic enrollment with a 1 percent automatic annual deferral of salary were the default rules. To “ease the pain” of the 1 percent deferral, the company gave managers a one time 1 percent bump in salary. Hat tip: Kare Anderson.

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After Google sidestepped China’s censorship laws with its home page, and the Chinese government responded by revoking the company’s license to operate, the two sides have reached a compromise by switching the default rule.

Originally, Google used a home page that displayed uncensored results. Going forward, it will use a home page that displays censored results, with a tiny link at the bottom taking users to a version of the home page that displays uncensored results.

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When Condé Nast closed Gourmet magazine last year, it automatically switched all of its nearly 900,000 regular subscribers over to a subscription for its sister publication Bon Appétit. The NYT reports that Condé Nast is being conservative with its upcoming subscription estimates at 1.5 million – just 200,000 over last year’s numbers. Gourmet and Bon Appétit subscription lists overlapped quite a bit (although Condé Nast won’t say exactly how much), but the actual March subscription figure was 1.67 million, which means a bump of approximately 400,000 readers.

“Ninety-nine point nine nine percent of a subscriber file, as you can imagine, will not opt to get their money back, but some will,” said Carol Smith, who joined Condé Nast last month from Elle as vice president and publishing director for Bon Appétit.

So the overlap is probably about 400,000-500,000 subscribers.

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1) Do Republicans respond differently than Democrats when their utility bills tell them how much energy they are using? Hat tip: Danny Vincent.

2) Remember the alarm clock that donates money to organizations you despise when you don’t get out of bed? How about a web site that donates money to those organizations when you procrastinate online. Hat tip: Gilad Buchman.

3) Do cities make signs about neighborhood parking confusing as a way to nudge people to park at meters and free up more space for neighborhood residents? Hat tip: Lou Wigdor.

4) Another web application for scoring your home’s energy efficiency. This one just raised $315,000.

5) PBS special Mind Over Money is available online (filmed, in part, at the University of Chicago).

6) The NCAA makes sickle cell testing the default option. Hat tip: Robert Barricelli.

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Cool Keeper is a voluntary program currently offered by Rocky Mountain Power that lets the company adjust your home’s air conditioner on very hot summer weekday afternoons in order to better meet surges in electricity demand. When activated, the company says temperatures in homes rise 1 to 3 degrees. To incentive customers, Rocky Mountain Power offers them $20 a year, and hooks up the device for no charge. Currently about 90,000 people participate.

The Utah legislature passed a proposal making Cool Keeper the default rule for customers, but it was vetoed by the governor. Why?

“I believe the people of Utah will be better served by continued educational campaigns about the importance of energy conservation and efforts to increase voluntary participation in programs such as Rocky Mountain Power’s Cool Keeper than they are by mandating participation with an opportunity to opt-out,” (he wrote in a veto letter).

The governor then promptly enrolled his personal home into Cool Keeper.

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A Nudge reader sends along word that the Naval Academy is updating its honor system, which must be voted on by the Midshipmen. To make sure the new code passes, the Academy’s Honor Congress is using the default yes vote. The vote is being held for each class at specific times. In an email to Midshipmen, the Honor Congress informs them, “If you do not show up to the wardroom vote or email me, your vote will be counted as a “YES” in favor of the revisions by default.”

Members of the Los Angeles City Council would be so proud.

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Israel is launching a potentially trailblazing experiment in organ donation: Sign a donor card, and you and your family move up in line for a transplant if one is needed. The new law is the first of its kind in the world, and international medical authorities are eager to see if it boosts organ supply.

Full AP story is here. The current organ donor rate in Israel is 10 percent, a figure that is thought to be driven by religious traditions. These traditions are likely why switching the default rule is a controversial move. More controversial than this proposal, anyway.

For an organ donor system to work, you need lots more potential organs, not lots more people who want one. That means the key to more organ donations is supply. But this design creates interesting perverse incentives. By moving up an entire family, this system allows one person to stand in for the demand of many. The incentive to move up is a strong one, and the possibility that a small group of new demanders are unlikely to increase the supply of organs, while driving up demand is a real one. In the article, Arthur Caplan, director of the Center for Bioethics at the University of Pennsylvania doubts “those signing donor cards would gain a significant advantage, because their queue would become much longer.”

Asked to expand on his thoughts, Caplan responded to a Nudge blog inquiry:

To be a cadaver organ donor you must die while on life support of a head injury permitting a brain death diagnosis with a relatively healthy body. Few deaths meet this description. Further to get an organ you must match for blood type and size of organ as well as usually antibody match. You also probably ought to be in geographic proximity to the donor. So offering an advantage to would be donors requires that you sign up huge numbers of donors to have a shot at getting a matched organ if you need one. But the more donors you sign up the less likely it is that anyone of them will gain an advantage in gaining access to an organ.

So at the end of the day the idea sounds good and in my view raises no ethical objection, but it is not readily implemented in the real world of transplant donation and allocation in terms of what it suggests will happen to those willing to identify as donors.

Hat tip: Peter Warnock.

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As final chapter of the book points out, nudges really are everywhere. Smart nudges on the other hand…

It’s called the automatic “yes” vote, and the Los Angeles Times reports that half of the City’s council members have used the automatic yes votes in order to be two places at once, usually meeting privately with others during the vote.

Many council votes are routine, and members could argue that time spent with lobbyists, mayoral aides or even reporters is more valuable than responding to repeated roll calls. But few make that case. A spotty voting record can easily become a political liability.

So instead of being recorded as absent, the council members have a technological fix: The chamber’s voting software is set to automatically register each of the 15 lawmakers as a “yes” unless members deliberately press a button to vote “no.”

The “yes” votes then flash on video screens throughout the chamber — and are placed in the clerk’s official record — even when members have left to grab a snack in the hall or hold a meeting.

Council members say they have a radio nearby that plays an audio feed so that they can change their vote if necessary. The Nudge blog can’t help but wonder if some private managers, who don’t have responsibilities to the general public, would ever adopt this kind of rule on the grounds of efficiency? And if the automatic “yes” vote says something more interesting about the number of uncontroversial, routine decisions that local politicians make?

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…for workers over age 22 in a new supplementary State retirement plan, if they aren’t participating in a better plan at their work. We’ll come back to what’s “better” in a minute. The choice architecture of the Irish plan is stronger than the plans used here in the U.S. and therefore bound to be more controversial. People who sign up get bonus payments from the government if they stay in for five years, and if someone opts-out, they are automatically re-enrolled again every two years. In other words, you have to keep opting out of the plan.

Over at the Geary Behavioural Economics Blog, Liam Delaney offers some excellent observations about the whole reform plan, which goes beyond automatic enrollment. Compared to the U.S., the plan is a generous one. One of its features is a 4 percent matching contribution that is split between an employer and the government. If a worker is in a plan that matches at higher levels–and therefore is “better”–that worker is not placed automatically in the State plan. But what if an employer’s “worse” plan currently matches at lower levels? asks Delaney.

The employer contributions aspects create strange incentives for employers. For example, a company with 100 workers earning 20-40k per year that currently has a pension scheme with 30 per cent take-up, could find themselves with an extra fifty thousand or so per year to pay in terms of staff costs. While the employer would be obliged under the current scheme to enroll people onto the pension plan, they would not be obliged to enthusiastically endorse this to their workers. The social interactions that take place in this regard are interesting to think about. In general, the employer response to a national automatic enrollment scheme where the employers are bearing a good chunk of the costs is an element not usually present in the US literature.

Addendum: Conversation about the new pension system here.

Addendum Too: 12 skeptical questions about the plan from Constantin Gurdgiev.

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