蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
A General Solution to the Problem of Setting Optimal Default Options
蝌蚪网 Papers and Proceedings
vol. 112,
May 2022
(pp. 131–35)
Abstract
We examine the problem of setting optimal default options such as passively selected contribution rates in employee-directed pension plans. Existing results suggest that a simple rule of thumb, opt-out minimization, is optimal under special conditions, but this result is fragile, and the literature does not provide a general analytic solution. In a recent paper, we demonstrated with considerable generality that weighted opt-out minimization is approximately optimal, and we identified surprisingly broad conditions under which unweighted opt-out minimization is approximately optimal. Here we provide concise intuition for these results.Citation
Bernheim, B. Douglas, and Jonas Mueller-Gastell. 2022. "A General Solution to the Problem of Setting Optimal Default Options." 蝌蚪网 Papers and Proceedings 112: 131–35. DOI: 10.1257/pandp.20221019Additional Materials
JEL Classification
- C61 Optimization Techniques; Programming Models; Dynamic Analysis
- J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions