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Default effects, transaction costs, and imperfect information

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posted on 2014-07-22, 11:50 authored by Christopher WilsonChristopher Wilson, Luke GarrodLuke Garrod, Alistair Munro
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.

History

School

  • Business and Economics

Department

  • Economics

Published in

ECONOMICS LETTERS

Volume

119

Issue

2

Pages

213 - 215 (3)

Citation

WILSON, C.M., GARROD, L. and MUNRO, A., 2013. Default effects, transaction costs, and imperfect information. Economics Letters, 119 (2), pp.213-215.

Publisher

© Elsevier

Publication date

2014

Notes

This paper is also a GRIPS Discussion Paper 12-16 and can be found at: http://r-center.grips.ac.jp/DiscussionPapersDetails/293/# This is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published at: http://dx.doi.org/10.1016/j.econlet.2013.02.022

ISSN

0165-1765

Language

  • en

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