> What does this say about the economists model of human behavior?
> -- Bill Dickens
> "The Power of Suggestion: Inertia in 401(k) Participation and
> Savings Behavior"
> findings. First, 401(k) participation is significantly higher
> under automatic enrollment. Second, the default contribution
> rate and investment allocation chosen by the company under
> automatic enrollment has a strong influence on the savings
> behavior of 401(k) participants.

These findings do not change the economic model of homo economicus,
economizing man.  It takes effort and time to make changes and gather
information, so inertia is to be expected.  Optimality is subjective rather
than being based on objective rewards.  The reasons for anchoring (being
stuck on certain concepts even though not objectively true or optimal) and
information bias are the subject area of psychology rather than economics.

Fred Foldvary 

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