Default options and social welfare: Opt in versus opt out
Bouckaert,J.M.C. Degryse,H.A.
Bouckaert,J.M.C.
Degryse,H.A.
Abstract
We offer a social-welfare comparison of the two most prominent default options – opt in and opt out – using a two-period model of localized competition. We demonstrate that when consumers stick to the default option, the prevailing default policy shapes firms' ability to collect and use customer information, and affects their pricing strategy and entry decision differently. The free-entry analysis reveals that fewer firms enter under opt out as competition becomes harsher, and that opt out is the socially preferred default option.
Description
Date
2013
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
SDG 1 - No Poverty
Citation
Bouckaert, J M C & Degryse, H A 2013, 'Default options and social welfare : Opt in versus opt out', Journal of Institutional and Theoretical Economics, vol. 169, no. 3, pp. 468-489. < http://www.ingentaconnect.com/content/mohr/jite/2013/00000169/00000003/art00005 >
License
info:eu-repo/semantics/restrictedAccess