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June 15, 2005

Defaults Make a Difference

Since 1995, more than 45,000 Americans have died waiting for organ transplants. If more people signed up as organ donors and followed through on their pledge, how many lives would it save?

Topics: Marketing

People sometimes sign up for things and then opt out later. Or they opt out now and opt in later. In both cases, they change their decision. Does it matter? In some cases, no, but in other cases it matters a great deal.

Take organ donation: when you renew your driver’s license, you can sign a card that makes you a potential donor. Can hospitals that handle organ donations rely on your pledge, and if so, to what degree? And what about people who don’t sign up — do they actually opt in at a later date? Knowing who will come through and who will not — and how best to sign them up — could help hospitals plan how many needy patients to put in their pipeline.

In organ donation, these are matters of life and death. In other domains — like flight insurance, retirement savings or Internet privacy — the stakes are lower but still high enough to make it worthwhile to look for an answer.

Professor Eric Johnson worked on this problem with Daniel Goldstein, using the Virtual Laboratory of the Center for Excellence in E-Business at Columbia Business School. They ran experiments over the Internet that gave hundreds of people essentially the same choice but in two different forms: (A) agree to be a donor, with an opt-out clause, and (B) decline to be a donor, with an opt-in clause. The researchers expected some difference, but the size of the spread shocked them. A’s outnumbered B’s by a factor of 2 to 1; people were twice as likely to agree to be a donor when they had to opt out as when they had to opt in.

Further research on different countries showed similar results. Rates of donor agreement and actual donation were low in Denmark, Germany, Netherlands and the United Kingdom, where potential donors had to opt in. These rates were much higher in Austria, Belgium, France, Hungary, Poland, Portugal and Sweden, where potential donors had to opt out.

In many situations, which default you build in makes a big difference. If you want people to do something in the future, ask them to agree to it now, with an opt-out clause. The default option — where they take no further action — is then in your favor. Johnson and Goldstein noted this result even in simple online agreements, where the default is a box already checked and the viewer can opt out by unchecking the box. That approach yields more positive results than asking the viewer to check the box.

The principle behind the results of this research might have even wider implications. When people see an option for the first time, they don’t yet have a preference one way or the other. Instead, they construct both the problem and the solution right there and then. So how you present the question — opt in or opt out — makes them see the whole matter in two very different lights. This is true for minor items like online offers and for major decisions like how much to save for retirement — and even, as we see with organ donation, for questions of life and death.

 

Eric Johnson is the Norman Eig Professor of Business and director of the Center for Excellence in E-Business (CEBiz) at Columbia Business School.

Read the Research

Eric Johnson, Daniel Goldstein

"Do Defaults Save Lives?"

View abstract/citation  Download PDF  

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