Mandated Choices and Default Choices

In this revision video, we look at the difference between Mandated Choices and Default Choices.

Mandated choices

A mandated choice is a situation or scenario in which people must decide in advance to whether they wish to participate in a particular action – they are required by law to make that choice.

Mandated choice is a variant of default choice except that the choices are mandated through the force of law / statutory regulations – we are seeing a lively debate about the extent and scope of mandated choice during the current pandemic.

For example, the decision in the UK in the summer of 2020 to make mask-wearing compulsory in retail shops and on public transport (save for those with an exemption) replacing voluntary choices beforehand. Will the UK government bring in some system of mandated vaccination passport for those wanting to travel overseas? Will this be extended to those wanting to buy tickets to major sporting and cultural events? And debate has been fierce on the question of whether employers should have the right to insist on a valid vaccination certification as a condition of having a job.

How is presumed consent different from mandated choice?

Presumed consent is the idea that someone is believed to have given permission for something unless they say they do not.

Evaluating Mandated Choices

1.Some justification on collective public health grounds?

Need to change behaviours quickly and at scale to curtail pandemic risks

Softer behavioural nudges / information campaigns might not be sufficient – an example – mandated use of seat-belts in vehicles

2.Possible conflict between public good and individual liberty

3.Possible conflict between social good and inequality

An example – can people afford covid tests before & after travelling overseas?

What are default choices?

The default choice or default option is the option that a consumer “selects” if he or she does nothing. Studies have shown that consumers rarely change the default settings.

1.Strong default choices can make demand price inelastic (PED<1)

2.Offers opportunities for some businesses to chargehigher prices and include default choices on services such as subscriptions

3.Defaults can make public policies to alter behaviourless effective

4.But using default choices / rules of thumb are notnecessarily irrational

5.Sticking to a default choice helps to reduce uncertainty / search costs

6.Small changes to defaults can have powerful effects – an example - changing default settings on household appliances

7.Consider working from home – an important change to the default for millions of people in the UK?