Examples of Policies
Countries that have an "opt-out" system for voluntary organ donation (anyone who did not explicitly refuse to donate have their organs in case of accident is considered a donor) experience dramatically higher levels of organ donation consent, than countries with an opt-in system. Austria, with an opt-out system, has a consent rate of 99.98%, while Germany, with a very similar culture and economic situation, but an opt-in system, has a consent rate of only 12%.
Cab drivers in New York City have seen an increase in tips from 10% to 22% after passengers had the ability to pay using credit cards on a device installed in the cab whose screen presented them with three default tip options, ranging from 15% to 30%.
Until recently, the default contribution rate for most tax-deferred retirement savings plans in the United States was zero, and despite the enormous tax advantages, many people took years to start contributing if they ever did. Behavioral economists attribute this to the "status quo bias", the common human resistance to changing one's behavior, combined with another common problem: the tendency to procrastinate. Research by behavioral economists demonstrated, moreover, that firms which raised the default rate instantly and dramatically raised the contribution rates of their employees.
Raising default contribution rates is also an example of asymmetric paternalism. Those who are making an informed deliberate choice to put aside zero percent of their income in tax deferred savings still have this option, but those who were not saving simply out of inertia or due to procrastination are helped by higher default contribution rates. It is also asymmetric in the second sense: If you do not believe that defaults matter, because you believe that people will make rational decisions about something as important as retirement saving, then you should not care about the default rate. If you believe that defaults matter, on the other hand, you should want to set defaults at the level that you believe will be best for the largest number of people.
Read more about this topic: Soft Paternalism
Famous quotes containing the words examples of, examples and/or policies:
“It is hardly to be believed how spiritual reflections when mixed with a little physics can hold people’s attention and give them a livelier idea of God than do the often ill-applied examples of his wrath.”
—G.C. (Georg Christoph)
“No rules exist, and examples are simply life-savers answering the appeals of rules making vain attempts to exist.”
—André Breton (1896–1966)
“To deny the need for comprehensive child care policies is to deny a reality—that there’s been a revolution in American life. Grandma doesn’t live next door anymore, Mom doesn’t work just because she’d like a few bucks for the sugar bowl.”
—Editorial, The New York Times (September 6, 1983)