The Power of Default

In the spirit of personal growth and self-improvement, I have been taking a few courses on Coursera, which I highly recommend. This week I started one titled, A Beginner’s Guide to Irrational Behavior by Dan Ariely, a professor at Duke University. I am completely intrigued by how irrational people’s decisions are – especially in a behavioural economics sense. I include my own decision-making in this statement 🙂

I had already seen one of Ariely’s talks on Ted so I knew this would be really good, but it is more than that already.

Organ Donation Stats Europe

Organ Donation Stats Europe

One of the series of short lectures this week was on the topic of “defaults.” Ariely starts with exploring the organ donor rates in various European countries. It is stark how different they are – ranging from close to zero to 100%! Virtually no countries fall in the middle and countries of seemingly similar cultures look nothing alike as you can see in the chart.

So why the stark differences? It comes down to defaults. The organ donor rates in countries with a low rate of “enrolment” have forms that have an “opt in” for organ donation and the ones with a high rate have an “opt out” box.

This made me think how I would be influenced by these default selections. If I am honest with myself, before ticking a box to donate organs (opt in), I can easily hear myself thinking, “Oh that is morbid. What if they harvest my organs wrong? I don’t want to even think about this!” – and not ticking the box. Equally, and beyond the shadow of a doubt, I would think the following on the opt-out: “What kind of asshole would I need to be to tick this box and 5 or 6 who could make use of my organs might die some day?” In either case, ticking the box would take a millisecond. This default effect is strong!

What is the point to other things in life? Well, almost everything. Another great example was an experiment of giving people a coupon for money off an “any” jam purchase and putting two displays in grocery stores. One display had 24 varieties of jam the other had 6. The display with 24 jams received more attention, which is likely not a surprise. What may come as a surprise is that people were 10 times more likely to buy from the display with 6 jams – 30% of people versus 3% of people. The is due to complexity of choice. This impact, along with defaults, is very strong.

In a coming post, I will tie this phenomena to what we discovered in our own survey. For now, let’s take a quick look at the implications to Internet applications. I think the effect of certain classes of online/mobile software are already “capitalizing” on these default and complexity effects. The most obvious examples are online dating sites and music services.

I am always hesitant to compare anything to dating sites because I think people are too incentivized to lie – what a friend of mine called the “hormonal incentive.” But the principle still holds – wade through the sea of people and give me the one or small number of choices for me. I think music services like Pandora Internet Radio and iTunes Genius are even more on target – bring up a tune I like because I don’t want to decide amongst the thousands of options available.

You can likely see where I am going with travel planning. People obviously want the right “default” choice for lodging, transportation, attractions, sites, destinations and so forth. Sounds easy? Not likely!

The key is to get the “right” default. If we expect people to take the default – it better be pretty much perfect – fabulous even!

The right choice for people is very different between individuals and very different even depending on the type and purpose of the trip. So they key for travelabulous will be making it fun, intuitive and easy for you to let us know what your likes and dislikes for travel are – and depending on the type/situation of the travel. We HAVE to get this right. We have no choice. This is the challenge because the current planning sites – even the “cool” startup ones – do the opposite of “default” in a way that is meaningful to me.

Good thing we love a challenge.

’til next time … Kirk, out.

5 thoughts on “The Power of Default

  1. Pingback: The IKEA Effect | Kirk Munroe

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