Default effects, transaction costs, and imperfect information
AbstractWe develop a decision framework with imperfect information to analyze the effects of transaction costs on the tendency for individuals to remain with a default option. We demonstrate how transaction costs can be a more important source of such default effects than commonly thought. A further, potentially surprising result shows that transaction costs are able to explain why some forms of default effects increase with the number of options.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 119 (2013)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/ecolet
Default effect; Transaction cost; Imperfect information;
Other versions of this item:
- Chris M. Wilson & Luke Garrod & Alistair Munro, 2012. "Default Effects, Transaction Costs, and Imperfect Information," GRIPS Discussion Papers 12-16, National Graduate Institute for Policy Studies.
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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