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    The Skeptical Shopper:

    How Default Options Affect Choice By What They Tell Consumers

    CHRISTINA L. BROWN

    ARADHNA KRISHNA*

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    *Christina L. Brown is Assistant Professor of Marketing and Aradhna Krishna isProfessor of Marketing at the University of Michigan. The authors would like to thankFred Feinberg, Carl Mela, Joe Urbany, Carolyn Yoon; members of the marketingdepartment at the University of Michigan and the Fuqua School of Business; and

    members of the University of Michigan Decision Consortium for comments on thismanuscript. We would also like to thank Mary Wagner for her help in coding Study 2.Correspondence should be directed to the first author ([email protected]).

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    Abstract

    A default option is the choice alternative a consumer receives if he/she does notexplicitly specify otherwise. In this article we argue that consumers may treat default

    designations as though they contain relevant information about the value of the product;i.e., when our preferences are uncertain, we look to defaults to tell us something aboutthem. More specifically, defaults can invoke a consumers marketplace metacognition(Wright 2002), his/her social intelligence about marketplace behavior (for example whyand how marketers attempt to manipulate the behavior of consumers). We demonstratethat how the consumer responds to the default depends on whether this social intelligenceis invoked and how it changes the meaning of the default. This metacognitive accountof defaults leads to different predictions than accounts based on cognitive limitations orendowment: in particular, it predicts that on some occasions low (less expensive) defaultswill have a greater positive impact on choice than high (more expensive) defaults.Moreover, it predicts the possibility of negative or backfire default effects. We report

    the results of three experiments that show that how the consumer responds to the defaultwill depend on 1) the ordinal position of the default, 2) whether or not a consumersmarketplace metacognition is readily accessible, and 3) whether or not a consumer ismotivated and able to use marketplace metacognition to interpret the meaning of thedefault.

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    You are purchasing a computer system on-line. There are several options

    for monitors: 15, 17, or 19. The standard system comes with 15 (theleast expensive option), but if you want, you can switch to the 17 or 19

    monitor (for more money).

    You are purchasing a computer system on-line. There are several options

    for monitors: 15, 17, or 19. The standard system comes with 19 (themost expensive option), but if you want, you can save money by switching

    to the 17 or 15 monitor.

    What is the marketer up to? Why do you think the marketer did what he

    did? Does your answer affect which computer you buy?

    Almost every consumer has encountered defaults when choosing among

    alternatives: the default option is the one the consumer will automatically receive if

    he/she does not explicitly specify otherwise. Although default options are not restricted to

    the Internet, the operational advantages of the Internet have made them more pervasive

    over the past few years. For example, on the Dell Computer website, computer systems

    come in a pre-packaged combination of RAM memory, hard drive size, disk-drive

    options, monitor, software, etc. However, if the consumer prefers a bigger hard drive, or a

    small monitor, she may adapt the package to her preferences by selecting her preferred

    attribute option from a menu. More notoriously, almost every reader of this article will

    have encountered the opt-out e-mail list, in which the consumer condemns herself to a

    lifetime of promotional emails unless she takes the time to deselect the send me

    emails box.

    Most existing research on the effects of default options concludes that default

    options affect choice by taking advantage of consumers cognitive and processing

    limitations. For example, Johnson, Lohse, and Bellman (2002) have shown that

    consumers who are obliged to opt out of an e-mail list are as much as twice as likely to

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    participate in the list than consumers who can explicitly choose between receiving and

    not receiving the emails, as though they had not noticed the difference. Similarly, Park,

    Jun, and MacInnis (2000) find that consumers presented with a fully-loaded car and

    given the opportunity to remove optional features for a cost savings end up with a more

    expensive set of features than those presented with a basic model and given the

    opportunity to add features for more money. Park et al.s explanation is related to

    endowment effects or loss aversion (Kahneman, Knetsch and Thaler 1991): they suggest

    that people presented with a default alternative shift their reference point to include the

    features of the default product, framing the forgoing of these features are a loss. In both

    cases, the implication is that defaults affect choice because consumers are unintentionally

    manipulated by the marketers choice of default. In other words, defaults cause consumer

    choices to deviate from their true preferences.

    In this article we argue that consumers may also treat default designations as

    though they contain relevant information about the value of the product(Prelec,

    Wernerfelt, and Zettelmeyer 1997; Wernerfelt 1995); i.e., when our preferences are

    uncertain, we look to defaults to tell us something about them. In particular, in some

    important circumstances a consumer might conclude that the default option is the one the

    marketer prefers to sell. In other words, the default is a marketing tactic that is

    interpreted by a consumers marketplace metacognition (Wright 2002), his/her social

    intelligence about marketplace behavior (for example why and how marketers attempt to

    manipulate the behavior of consumers). We demonstrate that how the consumer responds

    to the default depends on whether this social intelligence is invoked and what it means to

    the consumeronce invoked. Specifically, we show that how the consumer responds to the

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    default will depend on 1) the ordinal position of the default (i.e., whether or not a less-

    expensive or more-expensive alternative is the designated default), 2) whether or not a

    consumers marketplace metacognition is readily accessible, and 3) whether or not a

    consumer is motivated and able to use marketplace metacognition to interpret the

    meaning of the default.

    Importantly, our view of defaults as a source of marketplace information,

    filtered through a consumers prior knowledge of the marketplace, suggests different

    empirical results than would default effects generated by inattentiveness on the

    consumers part (Johnson et al. 2002) or by processing biases such as endowment,

    anchoring-and-adjustment (Park et al. 2000), and focus-of-comparison effects (Dhar and

    Simonson 1992). A story based on inattentiveness, anchoring, or focus-of-comparison

    should apply equally to low (less expensive) and high (more expensive) defaults. A story

    based on endowment suggests that a high default will have a greater effect on choice than

    a low default.

    Previous researchers are undoubtedly correct in their assessment that incomplete

    or biased processing helps make consumers more likely to choose default items in many

    circumstances. However, when defaults are information-based, we will show thatlow

    (i.e., less expensive) defaults can sometimes have more positive effects than high (more

    expensive) defaults, a result that cannot be obtained from existing theories. Even more

    remarkably, information-based defaults may create negative or backfire effects: if a

    consumer believes a marketer is suggesting a default that appears to be in the firms best

    interests but not the consumers, consumers may be lesslikely to choose an alternative

    when it is the default than when no default is indicated.

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    In our story about default effects, then, the consumer is not inattentive but

    skeptical and alert, reflecting that defaults can invoke the marketplace metacognition of

    the consumer to help him/her better predict the value of each alternative (Friestad and

    Wright 1994, Wright 2002). We present three studies to support our information-based

    explanation for default effects. In Study 1, we confirm the generally positive effect of

    default designations on choice among alternatives, and suggest circumstances in which

    low (less expensive) defaults may have greater positive effects on choice than high (more

    expensive) defaults. In Study 2, we show that the strength and direction of the default

    effect depends on whether or not marketplace metacognition is clearly invoked, and

    whether or not subjects see the marketer as acting for or against the self-interest of the

    consumer. In Study 3, we show that information-based default effects depend on whether

    the consumer is motivated and able to use his/her marketplace metacognition to interpret

    that information.

    THEORETICAL FRAMEWORK

    What Is a Default and What Does It Do

    We define a default as the alternative the consumer receives if s/he does not

    explicitly