BEGIN:VCALENDAR VERSION:2.0 PRODID:-//hacksw/handcal//NONSGML v1.0//EN CALSCALE:GREGORIAN BEGIN:VEVENT DTEND:20171016T223000Z UID:6ad8c63c67cb7 DTSTAMP:20261021T070340Z LOCATION:VPD 302 DESCRIPTION:

We report on an experiment examining why default options impact behavior. Working with one of the largest private firms in Afghanistan\, we randomly assigned each of 949 employees to different variants of a new default savings account. Employees assigned a default contribution rate of 5% are 40 percentage points more likely to contribute than employees assigned to a default contribution rate of zero\; to achieve this effect through financial incentives alone would require a 50% match from the employer. Our design permits us to rule out several common explanations for default effects\, including employer endorsement\, employee inattention\, and a lack of awareness about how to switch. Instead\, we find evidence that the default effect is driven largely by a combination of present-biased preferences and the cognitive cost of calculating alternate savings scenarios. Default assignment also causes employees to develop savings habits that outlive our experiment: they are more likely to believe that saving is important\, less likely to report being too financially constrained to save\, and more likely to make an active decision to save at the end of our trial.

URL;VALUE=URI:https://static.usc.edu/events/why_do_defaults_affect_behavior_experimental_evidence_afghanistan-1498863960 SUMMARY:Why Do Defaults Affect Behavior? Experimental Evidence from Afghanistan DTSTART:20171016T210000Z END:VEVENT END:VCALENDAR