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.
27 February 2019, 11:00 (Wednesday, 7th week, Hilary 2019)
Boardroom in Main Building but report to Main Reception and ask for Pauline Simpson
Dr Daniel Reck (London School of Economics)
Saïd Business School
Dr Martin Simmler (Oxford University Centre for Business Taxation),
Dr Irem Guceri (Oxford University Centre for Business Taxation)
Organiser contact email address:
Oxford University Centre for Business Taxation Research Seminars
Members of the University only