Chapter 9: The Quiet Power of Defaults

The Form on the First Day

Marek is twenty-four, and today is his first day at a new job in a company that repairs and services lifts in office buildings. In the morning, someone from the office gives him a thick folder of forms. There is a form for his bank details, a form for his emergency contact, a form about safety training and a form about a workplace savings plan. Marek reads the first page of the savings form. It is full of words he does not quite understand. He sees that if he does nothing, a small part of his pay will go into the savings plan each month, and he can change this or stop it at any time. He puts the form back in the folder and moves on to the safety training.

Marek's friend Daria started a job at a different company on the same day. Her company also has a workplace savings plan. But in her company, nothing happens unless she fills in a form to join. Daria reads the first page, feels the same confusion as Marek and also puts the form aside, planning to look at it properly later. "Later" turns into months.

A year later, Marek has a small but growing amount saved, without ever having made an active decision to save. Daria has nothing saved in the plan, although she would say, if asked, that saving for the future is important to her. The two friends are very similar people. They have similar incomes, similar habits and similar views about money. What was different was simply what happened if they did nothing.

What happens if you do nothing is called the default. This chapter is about the remarkable power of defaults: how they shape choices about saving, food, health, privacy and much more, why they are so powerful and how you can use them wisely in your own life. As always in this book, I will describe the evidence carefully and say where it is weaker than it first seemed. The savings plan here is simply an example of how defaults work.

What Happens If You Do Nothing

Almost every choice we face has a default, whether we notice it or not. A new phone arrives with settings already chosen. A form arrives with some boxes already ticked. A subscription renews automatically unless we cancel it. A meeting is held at the same time every week unless someone suggests a change. Even our daily routines are a kind of default: we take the same route to work, sit in the same seat and buy the same bread, unless something makes us choose differently.

Researchers have found again and again that defaults have a strong effect on what people end up with. When an option is set as the default, many more people end up with it than when they must actively choose it. This is true even when changing the default is easy, quick and free.

The best documented examples come from workplace savings plans like the ones Marek and Daria were offered. In a number of places, employers and governments changed their plans so that new workers were automatically enrolled, with the freedom to leave at any time, instead of having to sign up. In study after study, the share of workers who took part in the plan rose a great deal after the change. Most people stayed with whatever amount and arrangement the default set, even when other arrangements were available.

This finding has been confirmed in many different settings and is one of the most reliable results in behavioral economics. It also shows something important about defaults. They do not only decide whether people join something. They also shape the details, such as how much people save, because many people keep the default amount as well as the default decision to take part.

A closely related tendency is called status quo bias. "Status quo" is an old phrase meaning "the way things are now". Status quo bias is the tendency to keep things as they are, even when a change would make us better off. The default is often the status quo, and the status quo is often the default. Together they make the path of least effort very powerful.

Why Defaults Stick

Why do defaults have so much power, even when changing them is easy? Researchers have found several reasons, and they work together.

The first reason is effort. Changing a default requires us to notice it, think about the alternatives, decide and then act. Each of these steps costs a little time and attention. When we are busy, as most of us are, it is easy to put off even small tasks. The present bias described in the seventh chapter makes this worse: the effort is now, and the benefit is later, so "later" wins.

The second reason is that a default often looks like a recommendation. When an employer, a government or a company chooses a default, many people assume that it was chosen for a good reason, perhaps by experts who know more than they do. "If this is the standard setting, it is probably the sensible one." Sometimes this assumption is correct. Sometimes the default was chosen for other reasons, such as what is cheapest or most profitable for the organization. But the impression of a recommendation remains.

The third reason is loss aversion. Once a default is in place, it becomes our reference point. Moving away from it feels like giving something up, even if we never chose it in the first place. A person who is automatically enrolled in a savings plan may feel that leaving it means losing future savings. A person who is not enrolled may feel that joining means losing part of their monthly pay. The same plan, seen from two different starting points, produces two different feelings.

The fourth reason is uncertainty. When a choice is complicated and we are not sure what is best, doing nothing can feel safer than doing something. If we change the default and things go badly, we may blame ourselves. If we keep the default and things go badly, it feels less like our fault. Staying with the default protects us, in a way, from the regret of having made an active mistake.

There is nothing unreasonable in any of them. Each is a sensible response to a busy, uncertain world. But together they mean that whoever sets the default holds a great deal of quiet power over the choices of many people.

Nudges: Arranging Choices on Purpose

Once researchers understood the power of defaults and similar effects, some of them began to ask whether these effects could be used deliberately to help people make choices that were better by their own standards. This idea became known as the nudge. A nudge is a change in the way choices are presented that makes one option easier or more likely, without forbidding any option and without changing prices or rewards in a large way.

The way choices are arranged and presented is called choice architecture. Just as an architect shapes how people move through a building, a choice architect shapes how people move through a decision. Anyone who designs a form, a menu, a website, a timetable or a shop is a choice architect, whether they think of themselves that way or not. There is no completely neutral arrangement. Something has to come first on a menu, and some box has to be the default on a form.

Examples of nudges include setting a helpful default, such as automatic enrolment in a savings plan with the freedom to leave. They include placing healthier foods at eye level or at the start of a canteen counter. They include sending a short, clear reminder before an appointment or a payment deadline. They include printing on both sides of the paper as the standard setting on office printers. They include simplifying a long and confusing form so that more people manage to complete it.

The appeal of nudges is that they are often cheap and respect people's freedom. Nobody is forced to save, eat fruit or print on both sides. People who want something different can still choose it. The idea is simply to make the path that most people would choose, if they thought about it carefully, a little easier to follow.

How Strong Are Nudges, Really?

In the early years, many nudge studies reported impressive results, and the idea became very popular among governments and organizations. Teams in public bodies in many places began testing nudges on a large scale, for example in letters reminding people of payments due, reminders about health appointments and messages about energy use.

As more and more of these real-world trials were carried out and collected together, a more cautious picture emerged. A large review of real-world trials run by such teams found that nudges did, on average, have a real effect, but that the average effect was much smaller than the average effect reported in academic journal articles about nudges. One likely reason is that journals tend to publish studies with striking results more often than studies with small or no results, so the published picture was brighter than reality. This problem is called publication bias, and it affects many fields of research.

Other reviews have also found that the effects of nudges vary a great deal. Defaults tend to be among the strongest. Simple reminders and clearer information often have small but useful effects. Some nudges that worked well in one place had little or no effect in another. And a few widely reported results could not be repeated at all.

So what should we conclude? Nudges are not magic. A small change to a form or a message will not usually transform people's behaviour. But some nudges, especially well-designed defaults, can make a real and lasting difference, and many small effects added across many people can still matter. The most honest view is that nudges are a useful tool among many, not a replacement for good rules, fair prices, good information and real support.

When Defaults Work Against Us

Defaults can be used to help people, but they can also be used against them. Once you know how powerful defaults are, you begin to notice them in less friendly forms.

A subscription that renews automatically and can only be cancelled through a long and confusing process is using the power of defaults and effort to keep customers who might otherwise leave. A form with a pre-ticked box that agrees to receive advertising or to share personal information is relying on people not to notice. A free trial that turns into a paid plan unless you remember to cancel is counting on present bias and forgetfulness. Some people call deliberately difficult processes like these sludge: the opposite of a helpful nudge, a design that makes it harder to do what you want.

In many places, there are rules about some of these practices, and in some places pre-ticked boxes for certain kinds of agreement are not allowed. But rules differ from place to place and change over time, so the best protection is your own attention. Whenever you meet a default, it is worth asking: who chose this, and in whose interest?

This question does not need to make you suspicious of everything. Many defaults are chosen carefully and honestly to make life simpler. The standard settings on a well-designed device, the usual dose of an everyday product printed on its label or the usual route marked on a hiking trail are defaults that help. The aim is simply to know that a default is a choice someone else made for you, and that you are free to make a different one.

Three Lives and Their Defaults

Rosa is fifty-two and buys a new tablet computer to video-call her grandchildren. When she sets it up, she clicks "next" on every screen, as most people do. A few weeks later, her nephew visits and looks at her settings. He shows her that she has agreed to receive a great many notifications, that her location is shared with several applications and that a paid storage service will begin after a free month. None of these was a deliberate choice. Rosa and her nephew spend twenty minutes going through the settings together, turning off what she does not want and putting a reminder in her calendar for the date the free month ends. Rosa is surprised by how many decisions had been made for her without her noticing.

Ama is forty and manages the canteen in a large secondary school. She wants the students to eat more fruit and vegetables, but she does not want to forbid anything or lecture them. Following ideas she has read about, she makes some changes. Fruit is placed in an attractive bowl at the start of the counter instead of at the end. The vegetable dish of the day is served first and given a cheerful name on the board. Water is placed at eye level in the cold cabinet, and sweet drinks are still available on a lower shelf. Ama watches carefully over the following months. Some changes seem to make a difference, especially the fruit bowl. Others seem to change very little. She keeps what works and tries new ideas for the rest.

Marek, from the beginning of this chapter, eventually reads the savings form properly. He finds that the default amount is fairly small. After reading clear public information about saving in general and talking it over with an older colleague, he decides to keep the plan, and later to raise his own monthly amount a little. His friend Daria, after hearing about Marek's plan, finally fills in her own form. Both of them have now made active decisions. But Marek began a year earlier, simply because of where his starting point was set.

These lives show three sides of defaults. For Rosa, defaults chosen by others were quietly working against her wishes until she checked them. For Ama, defaults were a tool she could use to help others, with careful testing. For Marek, a helpful default gave him a good start, and he later turned it into his own active choice. In each case, the power of the default was the same. What differed was who set it, why, and whether anyone looked at it.

Setting Your Own Defaults

The most practical lesson of this chapter is that you can set defaults for yourself. Many of the choices in our daily lives are made again and again, and each time they are made, we are tempted by whatever is easiest in the moment. By deciding once, carefully, what will happen if we do nothing, we can make the good choice the easy one.

A person who wants to save might arrange for a fixed amount to move into a separate account automatically on payday, as the young couple did in the seventh chapter. A person who wants to read more might leave a book on their pillow each morning, so that it is the first thing they see at bedtime. A person who wants to cook at home more might keep a short list of simple default meals that can be made from ingredients that are always in the cupboard. A person who wants to spend less time on their phone might turn off most notifications, so that the default is quiet.

Personal defaults work for the same reasons that other defaults work. They remove effort from the moment of choice, they create a new reference point, and they protect us from our own tired, rushed or tempted moments. The key is to set them at a calm time, when you can think about what you really want, and then to review them now and then, because a default that suited you last year may not suit you today.

Practical Steps

First, read the defaults. When you sign up for something, set up a device or fill in a form, slow down at each pre-set choice and ask whether it is what you would choose yourself. Pay special attention to pre-ticked boxes, automatic renewals and settings about personal information.

Second, ask who chose the default and why. A default chosen by a trusted public body or a well-informed friend may be a good starting point. A default chosen by someone who profits from your choice deserves a closer look. In either case, the default is a suggestion, not a rule.

Third, put reminders before deadlines. When you start a free trial or a contract that renews automatically, put a reminder in your calendar a few days before the date when it will change. Present bias makes it easy to forget, and a reminder costs nothing.

Fourth, set good defaults for yourself. Choose one area of your life where you often make choices you later regret, and arrange things so that the better choice happens automatically or with the least effort. Make the helpful option the easiest one to reach.

Fifth, review your defaults regularly. Once or twice a year, look at your subscriptions, memberships, automatic payments, settings and routines. Ask whether each one still serves you. Defaults are powerful because they continue without attention, so they deserve a little attention now and then.

Sixth, when you set defaults for others, set them fairly. If you design a form, organize an event, run a household or lead a team, the defaults you choose will shape what others end up with. Choose defaults that you believe most people would choose for themselves if they thought it through, and make it easy to choose differently.

A Short Exercise: The Default Audit

This exercise helps you see how many of your choices are being made by defaults. It takes about thirty minutes and can be done in stages.

Take a sheet of paper and make four headings: "Money", "Devices", "Time" and "Home". Under "Money", list every regular payment that happens automatically: subscriptions, memberships, renewals and transfers. Under "Devices", note the main settings on your phone or computer that you have never looked at, such as notifications, location sharing and automatic updates. Under "Time", write down the regular commitments in your week that happen simply because they always have: meetings, routines and habits. Under "Home", note things that happen by default in your household, such as who does which chores, what is bought every week and how evenings are usually spent.

Now go through each list and mark each item with one of three symbols. A tick means "I chose this, and I still want it." A question mark means "I did not really choose this, but it might be fine." A cross means "I did not choose this, and I do not want it."

For every cross, write down one small action that would change it, and choose a day this week to take that action. For every question mark, decide whether to look into it now or to review it at a later date that you write down. For every tick, simply enjoy the fact that this default is working for you.

Finally, choose one new default that you would like to create. It might be a regular transfer into savings, a weekly phone call to a friend, a book by the bed or a short walk after lunch. Write down exactly what will happen if you do nothing, and set it up so that it does.

Questions People Often Ask

"Are nudges a form of manipulation?" This is a serious question, and thoughtful people disagree about it. Nudges influence choices in ways that people may not notice, which some people find uncomfortable. On the other hand, every arrangement of choices influences people in some way, and there is no neutral way to design a form or a canteen. Many people think nudges are acceptable when they are transparent, when they help people toward goals that the people themselves share and when choosing differently is easy. They are much more troubling when they are hidden, when they serve someone else's interests against the chooser's, or when changing course is deliberately made hard.

"Should I trust the default settings on things I buy?" Sometimes. Default settings are often chosen to make a product work reasonably well for most people, which can be helpful. But they may also be chosen to collect information, encourage more spending or keep you using a service. A quick look at the most important settings, especially about privacy, payment and notifications, is usually worth the few minutes it takes.

"Why do I keep paying for things I no longer use?" Because the payment continues by default, while stopping it requires effort, a decision and sometimes an awkward conversation. Present bias says "I will cancel next week," and loss aversion says "But I might use it again." This is extremely common and not a sign of carelessness. The default audit and calendar reminders described in this chapter are simple ways to catch these payments before they add up.

Chapter Summary

A default is what happens if you do nothing. Defaults have a strong and well-documented effect on what people end up with, especially in areas such as workplace savings plans, because changing them takes effort, because they look like recommendations, because they become our reference point and because doing nothing feels safer. The tendency to keep things as they are is called status quo bias.

A nudge is a change in the way choices are presented that makes one option easier without forbidding others, and the arrangement of choices is called choice architecture. Real-world reviews have found that nudges work on average but much less strongly than early studies suggested, with defaults among the more powerful ones. Defaults can also be used against us, through automatic renewals, pre-ticked boxes and deliberately difficult processes.

The practical tools are simple: read defaults, ask who chose them, set reminders, create good defaults for yourself and review them regularly. In the next chapter, we turn to another quiet force on our choices: what the people around us are doing.