AEA
Exercise
The American Economic Association once considered letting the members elect to drop one of the three association journals and get a credit. The claim was that fewer members would choose to drop a journal if the default was presented as all three journals (rather than the default being two journals with an extra charge for getting all three). What is the difference between the two options? How would you explain the preference of the decision makers to offer the first one?
Based on D. Kahnemann, D., Knetsch, J., and R. Thaler. (1991), “Anomalies: Endowment Effect, Loss Aversion, and Status Quo Bias,” Journal of Economic Perspectives, 5,1, pp. 193-206.
Analysis
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