Default choices drive taxi tipping
PHOTO: © AGF SRL/ALAMY
Default options are an effective means of influencing consumer choices: With opt-out choices as defaults, people donate more organs and set aside more money for retirement. But how do people respond when faced with short-term choices in everyday life? Haggag and Paci analyzed 13 million taxi rides taken in New York City in 2009. They find that most customers press one of the default option buttons (for example, a $3 tip for a ride under $15) that specify the amount to tip the driver—enough to raise the average amount tipped across the full sample. Alternatively, some riders opt instead to leave no tip at all.
Am. Econ. J. Appl. Econ. 10.1257/app.6.3.1 (2014).
