Behavioral Economist: In corporate retirement plans, participation rates soar when employees are automatically enrolled rather than required to actively opt in. Studies indicate that making enrollment the default drastically reduces the initial administrative effort required to start saving, while completely preserving the employees' freedom of choice to opt out later. Therefore, default enrollment policies effectively overcome the psychological inertia that typically prevents people from saving. Consequently, companies that truly wish to maximize their employees' long-term financial well-being must universally adopt automatic enrollment programs.
Which one of the following most accurately describes the role played in the behavioral economist's argument by the claim that default enrollment policies effectively overcome the psychological inertia that typically prevents people from saving?
- It is a subsidiary conclusion drawn from evidence about reduced administrative effort, which in turn is used to support the argument's ultimate recommendation.Answer
- BIt is the argument's main conclusion, which is directly supported by evidence regarding employee participation rates and administrative effort.
- CIt is background information intended merely to introduce the widespread financial phenomenon that the economist is attempting to resolve.
- DIt is an independent premise that relies on a shifting definition of psychological inertia to justify the preservation of employee choice.
- EIt is a broad psychological generalization introduced to suggest that external interventions are universally required to change human behavior.