Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202683
Authors: 
Altmann, Steffen
Grunewald, Andreas
Radbruch, Jonas
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12337
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Passive behavior is ubiquitous - even when facing various alternatives to choose from, people commonly fail to take decisions. This paper provides evidence on the cognitive foundations of such "passive choices" and studies implications for policies that encourage active decision-making. In an experiment designed to study passive behavior, we document three main results. First, we demonstrate that scarcity of cognitive resources leads to passive behavior. Second, policies that encourage active choice succeed in reducing passivity and improve decisions in the targeted domain. Third, however, these benefits of choice-promoting policies come at the cost of negative cognitive spillovers to other domains.
Subjects: 
passivity
cognitive resources
scarcity
spillover effects
active decision-making
default options
JEL: 
D91
D01
D04
C91
Document Type: 
Working Paper

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