Defaults and Path of Least Resistance

Really interesting point about Defaults and Path of Least Resistance in the Behavioural Economics course from Duke.

People were given a course of branded medication. During the course they were offered generics – the same drug but substantially cheaper. The take up rate was practically 0%. So, it appears people prefer branded medication.

However, if people were told they would not receive any further medication until they made a choice then there is a drastic change. Now, 82% chose generics.

People generally avoid changes, even if they are minor and even when another path is clearly better.

Another case run in a shop selling jams.
One day, it had 6 jams on display and another day it had 24 jams on display. People were given coupons with money-saving offers on the jam.

Unsurprisingly, 60% went to the 24 jam booth – it’s more exciting. And more people were willing to try from this booth.

However, from which booth were people more likely to purchase jam?

The answer? 30% bought from the 6 jam booth, 3% bought from the 24 jam booth.

Why? Some people had jam as their default – it was on their shopping list. So, you see many, you see few, you will buy some jam. However, for many people jam is not on their shopping list. So, it’s not part of the default.

So, what’s the percentage of people having jam on their shopping list (i.e. the Default)? It’s around 3%.

So, how did the 6 jam booth get so much action on jam? People are overwhelmed by choice. The complexity of the 24 jam booth overwhelmed their desire to buy jam.


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