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Optimal default options

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  • Bernheim, B. Douglas
  • Mueller-Gastell, Jonas

Abstract

Previous studies of optimal default options demonstrate that either opt-out minimization or maximization is optimal under restrictive conditions. We obtain a general characterization of the solution by studying optimal defaults when one of the problem’s parameters approaches a limiting value. We interpret these “asymptotic optima” as approximate optima for non-limiting cases and justify this interpretation through numerical simulations. When the designer and choosers agree about the activity’s value, simple forms of weighted opt-out minimization are asymptotically optimal. Additional results encompass Pigouvian fees, normative ambiguity, and cases in which the designer and choosers disagree about the activity’s value.

Suggested Citation

  • Bernheim, B. Douglas & Mueller-Gastell, Jonas, 2024. "Optimal default options," Journal of Public Economics, Elsevier, vol. 237(C).
    • Handle: RePEc:eee:pubeco:v:237:y:2024:i:c:s0047272724001397
    DOI: 10.1016/j.jpubeco.2024.105203
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    References listed on IDEAS

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