Automatically enrolling employees into 401K plans and deducting automatically from each pay check to increase retirement savings, while providing an "opt out" clause, is an example of the application of:

Question

Quizplus · Accepted Answer

This is an example of nudge theory, which involves adjusting the choice architecture or environment in a way that encourages people to make better decisions without limiting their freedom of choice. In this case, employees are defaulted into a 401K plan with the ability to opt-out, which has been shown to increase retirement savings participation rates. It is not an example of unethical coercion, anchoring bias, or negative value theory.

Automatically Enrolling Employees into 401K Plans and Deducting Automatically from Each