Do defaults save lives? | MBA Learnings

First-year student Rohan Rajiv is blogging once a week about important lessons he is learning at Kellogg. Read more of his posts here.

A powerful study by Goldstein and Johnson in 2003 explored the relevance of defaults in organ donation. We discussed their findings and the implications in our class on “Values based Leadership.” Most countries have big problems with organ donations due to the large gaps between the number of donors and the number who need organs. However, this graph illustrating the difference in organ donation rates in the European Union is telling.

As you can see, countries like Denmark, the UK, the Netherlands and Germany average around 10% while the rest are close to a 100%. The difference? Defaults.

In the “default” countries, citizens see a checked box in the form they submit to sign their driving licenses (for example) that says they will donate their organs when they die. It is up to them to un-check the box. And, clearly, very few do. This idea has been documented in researcher Richard Thaler’s book, “Nudges,” which discusses how small nudges by policy makers can make a big difference in society. This is an example of that. And, Goldstein and Johnson’s research shows that defaults are a powerful way to influence people.

I think this research also speaks to the power of strong cultures. Strong cultures are built around defaults and the idea of “this is what people like me do.” Defaults may just be the closest shortcut to cultural change. Governments such as the UK have understood that and have been setting up “Nudge committees” to study areas where important policy can be nudged. The challenge, of course, is that people hate the government playing big brother. However, nudges and the idea of defaults are here to stay and it’ll be interesting to see how policy makers use these tools to influence us.

One such researcher who is working hard to change things is Dan Ariely. And, I am reminded of this comment from him when I interviewed him two years ago.

“I look at the whole world, and then I say, “Is this a place that is the outcome of seven billion rational people? If everybody was perfectly rational this would have been the best world imaginable. The conclusion very easily is no. In a couple of hours I’m leaving for Africa where there’s a tremendous amount of illness and poverty. There is also a tremendous amount of hope. If this world is not the outcome of seven billion rational people, maybe we can do better.

It’s true that when you look at individuals, you can say for each individual, “I wish you were more rational in some ways.” But for the planet as a whole you say “My goodness the gap between where we are and where we could be is tremendous.” There are a lot of things to improve. I think we can do much more. That’s my hope. My hope is that as we’re learning more we will improve things. Both in terms of my personal life and in terms of my outlook on the world in general, it’s a good thing.”

Rohan Rajiv is a first-year student in Kellogg’s Full-Time Two-Year Program. Prior to Kellogg he worked at a-connect serving clients on consulting projects across 14 countries in Europe, Asia, Australia and South America. He blogs a learning every day, including his MBA Learnings series, on www.ALearningaDay.com.