The Art of Thinking Clearly

by Rolf Dobelli

experiment: There is a shortage of organ donors. Only about 40 percent of people opt for it. Scientists Eric Johnson and Dan Goldstein asked people whether, in the event of death, they wanted to actively opt out of organ donation. Making donation the default option increased take-up from 40 percent to more than 80 percent of participants, a huge difference between an opt-in and an opt-out default. The default effect is at work even when no standard option is mentioned. In such cases, we make our past the default setting, thereby prolonging and sanctifying the status quo. People crave what they know. Given the choice of trying something new or sticking to the tried-and-tested option, we tend to be highly conservative, even if a change would be beneficial. My bank, for example, charges an annual fee of $60 for mailing out account statements. I could save myself this amount if I downloaded the statements online. However, though the pricey (and paper-guzzling) service has bothered me for years, I still can’t bring myself to get rid of it once and for all. So where does the “status-quo bias” come from? In addition to sheer convenience, loss aversion plays a role. Recall that losses upset us twice as much as similar gains please us. For this reason,