In 2000,researchers Brigitte Madrian and Dennis Shea analyzed the 401(k)savings behavior of employees in a large U.S.corporation before and after an interesting change in the company 401(k)plan.
Before the plan change,employees were automatically enrolled as participants in the company 401(k)plan upon being hired and were required to complete paperwork if they wanted to opt in.After the plan change,new employees were automatically enrolled in the 401(k)plan and were required to complete paperwork if they wanted to opt out.The amount of time and effort required to either opt in or opt out was approximately equal.None of the economic features of the plan changed.
The researchers found that 401(k)participation is significantly higher under automatic enrollment.Describe how framing effects can be used to explain the significantly higher participation under automatic enrollment.

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The Answer of In 2000,researchers Brigitte Madrian and Dennis Shea analyzed the 401(k)savings behavior of employees in a large U.S.corporation before and after an interesting change in the company 401(k)plan.
Before the plan change,employees were automatically enrolled as participants in the company 401(k)plan upon being hired and were required to complete paperwork if they wanted to opt in.After the plan change,new employees were automatically enrolled in the 401(k)plan and were required to complete paperwork if they wanted to opt out.The amount of time and effort required to either opt in or opt out was approximately equal.None of the economic features of the plan changed.
The researchers found that 401(k)participation is significantly higher under automatic enrollment.Describe how framing effects can be used to explain the significantly higher participation under automatic enrollment.

In 2000,researchers Brigitte Madrian and Dennis Shea Analyzed the 401(k)savings