Default effects, transaction costs, and imperfect information

We develop a decision framework with imperfect information to analyze the effects of transaction costs on the tendency for individuals to remain with a default option. We demonstrate how transaction costs can be a more important source of such default effects than commonly thought. A further, potentially surprising result shows that transaction costs are able to explain why some forms of default effects increase with the number of options

Subject’s relationship to recipient.

<p>Subject’s relationship to recipient.</p

Altruism between kin and others.

<p>Altruism between kin and others.</p

Crossover value (Rand), by relationship.

<p>Crossover value (Rand), by relationship.</p

Crossover value (Rand), by relatedness.

<p>Crossover value (Rand), by relatedness.</p

Social discounting task–person #1.

<p>Social discounting task–person #1.</p

Altruism between family, kin, partners and friends.

<p>Altruism between family, kin, partners and friends.</p

Altruism between family, kin, partners, friends and others.

<p>Altruism between family, kin, partners, friends and others.</p