Keywords
automatic enrollment, choice framing, 401(k) participation
Abstract
Seemingly minor changes in the way a choice is framed to a decision maker can generate dramatic changes in behavior. Automatic enrollment provides a clear example of such effects. Under automatic enrollment (also called negative election), employees are automatically enrolled in their company’s 401(k) plan unless the employees elect to opt out of the plan. This contrasts with the usual arrangement in which employees must actively choose to participate in their employer’s 401(k).
Original Publication Citation
“For Better or For Worse: Default Effects and 401(k) Savings Behavior.” 2004. In David A. Wise, editor, Perspectives on the Economics of Aging, Chicago: University of Chicago Press, pp. 81-121 (with James J. Choi, David Laibson and Andrew Metrick). http://www.nber.org/chapters/c10341.pdf
BYU ScholarsArchive Citation
Choi, James J.; Laibson, David; Madrian, Brigitte C.; and Metrick, Andrew, "For Better or for Worse: Default Effects and 401(k) Savings Behavior" (2004). Faculty Publications. 9088.
https://scholarsarchive.byu.edu/facpub/9088
Document Type
Peer-Reviewed Article
Publication Date
2004
Publisher
University of Chicago Press
Language
English
College
Marriott School of Business
Department
Finance
Copyright Use Information
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