Default effects, transaction costs, and imperfect information

We develop a decision framework with imperfect information to analyze the effects of transaction costs on the tendency for individuals to remain with a default option. We demonstrate how transaction costs can be a more important source of such default effects than commonly thought. A further, potentially surprising result shows that transaction costs are able to explain why some forms of default effects increase with the number of options.

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Year of publication:	2013
Authors:	Wilson, Chris M. ; Garrod, Luke ; Munro, Alistair
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 119.2013, 2, p. 213-215
Publisher:	Elsevier
Subject:	Default effect \| Transaction cost \| Imperfect information

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Type of publication:	Article
Classification:	D03 - Behavioral Economics; Underlying Principles ; D83 - Search, Learning, Information and Knowledge
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010664141