Optimal defaults with normative ambiguity
Please arrive 10 minutes before the start time of the seminar in order to ensure a prompt start.
Default effects are pervasive, but the reason they arise is often unclear. We study optimal policy when it is ambiguous whether an observed default effect reflects a welfare-relevant preference or a mistake by decision-makers. Within a broad class of models, determining optimal policy
is impossible without resolving this normative ambiguity. Depending on the resolution, optimal policy tends in opposite directions: either minimizing the number of non-default choices or promoting active choices. We illustrate our results using data on pension contribution defaults.
When selecting a non-default option reduces employee welfare by less than $160, the optimal policy promotes active choices.
Date: 27 February 2019, 11:00 (Wednesday, 7th week, Hilary 2019)
Venue: Boardroom in Main Building but report to Main Reception and ask for Pauline Simpson
Speaker: Dr Daniel Reck (London School of Economics)
Organising department: Saïd Business School
Organisers: Dr Martin Simmler (Oxford University Centre for Business Taxation), Dr Irem Guceri (Oxford University Centre for Business Taxation)
Organiser contact email address: pauline.simpson@sbs.ox.ac.uk
Part of: Oxford University Centre for Business Taxation Research Seminars
Booking required?: Required
Booking email: pauline.simpson@sbs.ox.ac.uk
Audience: Members of the University only
Editor: Pauline Simpson