Default effects, transaction costs, and imperfect information
journal contributionposted on 22.07.2014 by Christopher Wilson, Luke Garrod, Alistair Munro
Any type of content formally published in an academic journal, usually following a peer-review process.
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.
- Business and Economics