HOW DOES OPT-IN VS OPT-OUT WORK
FOR REPEATED CHOICES IN CHARITY
DONATION?
The influence of nudges and moral identity when giving repeated
possibilities for charity donations.
By
Anne Engelen
University of Groningen
TABLE OF CONTENT
ABSTRACT 3
PREFERANCE 4
INTRODUCTION 5
THEORITICAL BACKGROUND & HYPOTHESES 9
RESEARCH DESIGN 18
Data collection and research design 18
Procedure 19
Variable operationalization 21
Method of analysis 22
RESULTS 23
DISCUSSION, MANAGERIAL IMPLICATIONS, LIMITATIONS & FUTURE RESEARCH AND CONCLUSION
Discussion 28
Managerial Implications 32
Limitations and Future Research 33
Conclusion 36
REFERENCES 37
ABSTRACT
A lot of research studied the default effect showing that an opt-out decision is different from an opt-in decision (Pichert & Katsikopoulos 2008; Liksokin 2009; Johnson at al. 1993; Johnson, Bellman & Lohse, 2002). However, not all decisions we make are one-time-only decisions. For example: normally you agree for a subscription in where a charity is charging a specific amount every month. But now, Unicef is setting up a system in where they sent their customer base a monthly text message that it is time to donate again. The customers can then choose to donate or not to donate that particular month. This paper takes the next step in examining the default effect on the willingness to donate over a series of decisions. We test whether individuals donate more or less often whenever they have to make the same choice to donate over and over again. A 2 (default: opt-in vs opt-out) Between Subjects x 10 (round T1-T10) Within Subjects experimental design was used to investigate the effect of repeated choices on actual donating behaviour. Within our sample we found that participants in the opt-out condition decided to donate more often than participants in the opt-in condition. This difference between the two conditions remained over time. No changing donation behaviour has been found over time in both conditions. Lastly, the proposed moderating role of moral identity was not supported by this research.
PREFERANCE
This master thesis marks the end of my Master Marketing Management at the University of Groningen. My volunteer time in Cambodia inspired me to write my thesis in the field of charitable behaviour. Therefore, I have been writing this thesis with a lot of passion and devotion. But not without any challenging and interesting obstacles. That is why I would like to thank several people who have helped me writing this thesis.
First, I would like to express my deep and sincere gratitude to my supervisor Dr. M.C.
Leliveld for her time, valuable and constructive feedback, her support, positive attitude and of course her priceless enthusiasm about my research. I would also like to thank my fellow students and friends, Miriam Jansen, Jetty Komrij and Charlotte van Vught, not only for the past two years of friendship but also for their support and help during my entire pre-master and master.
Finally, a special word of thank to my parents Hans Engelen and Yvonne Roumen who made it possible for me to study at the University of Groningen, for their unconditionally support, and for keeping me motivated in times of downturns. Without them I would never have been able to achieve this.
INTRODUCTION
In the last decades the charity sector has developed enormously, therefore people nowadays are overwhelmed with persuasive messages by charities fighting for the consumer’s attention (Sargeant & Lee, 2014). Because of new entrants and decreasing support of the government, the need for private charitable support has increased (Das, Kerkhof & Kuiper, 2008).
Fortunately, it is in the nature of human beings to care about other people and behave
accordingly (Nelson & Jung, 2013). Donating to charities is a way of showing that one cares (Savery, Goldsmith & Dhar, 2015).
For decades, researches try investigated methods to increase the need for people to donate time or money to charity programs. Marketing strategies for commercial purposes have become an important tool for charity organizations to raise donations (Venable, Rose, Bush & Gilbert, 2015). One of those tools involves the way messages are presented to the people. Several message tactics as ‘foot in the door, attribute framing and framing anchoring techniques’ have been established to increase the perceived value of the charity’s goal and raise the willingness to donate (Chang & Lee, 2010; Bendapudi, Singh & Bendapudi 1996; Schiborwky & Peltier, 1995; Hannah & Cafferty, 2006; Smith & Berger 1996). Note that a judgement about the message is formed from the moment the potential donors are exposed to the message. Potential donors therefore constantly need to make choices about whether to donate or not (Smith & Berger, 1996).
Another way to influence consumer’s decision making is by means of the choice architecture which is used as the design of different ways in which choices can be presented to people and the impact of the presentation may have on their decision making. To enlarge our
an aspect of the choice architecture (Thaler & Sunstein, 2008). A nudge is any aspect of choice architecture that alters people’s behaviour in a predictable way without forbidding any choices or significantly changing their economic consequences (Thaler & Sunstein, 2008). For example, when replacing candies with fruit in the impulse basket next to the cash register, people will buy more fruit and less candy (Thaler & Sunstein, 2008). Or, when you buy a coffee, and a barista offers a pastry as well, we are more likely to buy the pastry when is is offered as a suggestion. Another example, a well-known factor influencing people’s decision making is the default effect of opt-in and opt-out. Studies show that opt-in and opt-out systems have been significantly influencing people’s decision making (Jonson & Goldstein 2003; Madrian & Shea, 2001; Pichert & Katsikopoulos, 2008; Liksokin, 2009; Johnson at al. 1993; Johnson, Bellman & Lohse, 2002). An influential paper on the default effect by
Johnson and Goldstein (2003) involves organ donation. These authors found that, when the default is activated as opt-out instead of opt-in, more people are subscribed as organ donors. In other words, when people are automatically registered as an organ donor and they have to unsubscribe themselves when they wish not to be, the amount of donors turns out to be higher than when they have to register themselves to be an organ donor.
to choose whether they would like to donate or not that specific month. This requires people to make repeated choices over and over again. It is interesting because up until now
researchers have only focused on situations where people needed to make decisions once. For example, someone only chooses to be a donor once in life, a retirement planning is chosen only once, and on a normal basis you do not choose your insurance regularly, etc. But what happens if people must make this type of decision repeatedly: will the default effect remain as powerful?
To understand the effect of opt-in and opt-out on repeated choices we need to understand the reason why people donate in the first place. People experience a feeling of ‘warm glow’ from acting in a way of giving to other people (Andreoni, 1988). The warm glow of giving refers to prosocial behaviour that causes donors to experience positive feelings, irrespective of whether their giving actually makes a difference. People experience not only the feeling of altruism, but also the feeling joy for acting in a giving way (Andreoni, 1998). This is also known as the personal satisfaction for having ‘done the right thing’ (Andreoni, 1998). A number of studies have provided significant evidence for the warm glow effect (Crumpler & Grossman, 2008; Millner & Razzolini, 2013). Furthermore, making the choice to donate shows other people in their environment they act according to certain norms, values and expectations (Shang, Reed & Croson, 2008). Both the feeling of warm glow and acting according to the shared
al., 2009; Jordan et al., 2011). In conclusion, the extent to which an individual perceived morality ‘measures up’ seems to be an important driver of moral behaviour.
So on one hand we argue that people tend to choose to donate as they want to remain their feeling of warm glow. This holds for both the opt-out and opt-in condition, but it is expected that the warm glow of giving will have more influence in the opt-in condition as here people actually need to take action to donate to the charity. On the other hand, according to the default effect we see that people in an opt-out condition tend to donate more often than in the opt-in condition because of effort reasons and because they assume that policy makers have made the ‘right’ decision for them. So from the perspective of both the warm glow of giving and the theory of the default effect donations in both conditions are assumed. As previous research concerns one-time-only decisions, this research will look more closely at what happens when people need to decide repeatedly whether to donate or not. For example, it is possible that people who initially repeatedly say no to donate in the first decision rounds, eventually say yes to donate as saying no will negatively influence their feeling of warm glow and thus their moral self image.
An understanding of how individuals respond to repeated opt-in versus opt-out messages is essential for charity marketers to develop strategies in order to increase charitable donations. The research question of this paper is therefore formulated as: How does opt-in vs opt-out
work for repeated choices in charity donations? The hypotheses are build up on research from
the default effect, warm glow and repetition. Furthermore, the potential moderating effect of moral identity is explored, as moral identity is said to be important regarding ethical
THEORITICAL BACKGROUND & HYPOTHESIS
Default effect
During the last decades researches have become more interested in way consumers make decisions when they have several options to choose from. The default effect has been
proposed as an effective way of influencing people’s decision making. Many researches have already been done on this phenomena (e.g., Goldstein & Dinner, 2013; Johnson, Bellmann & Lohse, 2002; Pichert & Katsikopoulos, 2008). A default can be defined as an externally determined option that people receive by not explicitly choosing otherwise (Goswani & Urminsky, 2016). One of the classical papers is the research by Johnson and Goldstein (2003). As mentioned in the previous chapter they showed that the percentage of organ donation turns out to be higher when people need to opt-out rather than opt-in to be an organ donor. Also in the field of retirement planning this effect was found. It turns out that
participation is significantly higher under automatic enrolment. This means that when people need to opt-out if they do not want to participate in the program, more people stay with the retirement planning program (Madrian & Shea, 2001). Also studies about preference for green electricity (Pichert & Katsikopoulos, 2008), corporate law (Liksokin, 2009), car insurance (Johnson at al. 1993) and privacy settings (Johnson, Bellman & Lohse 2002) show this strong effect of opt-out. Also in the field of charity donations the strong effect of the default is found. Here, participants in the opt-out condition donate more than participants in the opt-in condition (Everett, Caviola, Kahane, Savulescu & Faber, 2014). We expect that this result will be replicated in our research when participants are making their first decision. Hence, the first hypotheses is:
H1: In the first decision round the opt-out condition will generate a larger percentage of donations compared to the opt-in condition
To be able to hypothesize what will happen with the default effect over time, we need to understand what drives this effect. Three causes were found that could explain the effect of influencing people’s choices (Johnson & Goldstein, 2003). First, decision makers might think that defaults are suggestions and see this as a recommendation. So people tend to say
immediately yes as they see the default option as the best possible choice. The default effect suggests that setting an opt-out default instead of an opt-in default are more likely to increase charitable donations. So when people are automatically subscribed for a donation, or the donation option is pre-selected for them, they see this as a recommendation and will choose to stick to this recommendation (Goswami & Urminsky, 2016). This is because it takes more effort to actively unsubscribe for the donation than just accepting the opt-out default (McIntosh, 2014). When people do opt-out for a decision to donate they simply say no to donating money to a charity. As this is in contrast with the company’s recommendation (default) it could encourage some negative feelings. For instance, someone’s moral self image or the feeling of warm glow some one gets from donating to a charity could be harmed (Mayo & Tinsly, 2009; Hibbert, S, Smith, A, Davies, A & Ireland, F, 2007). Because of this negative feeling it is plausible that people will change their behaviour accordingly. This is because after individuals act immorally (in this case say no to donating), they seek to strengthen their self-concept by engaging in moral actions (Sachdeva et al., 2009; Jordan et al., 2011). So when people repeatedly have to make decisions it is plausible that they will say yes to donating after they have said no.
Goldstein, 2003). Also, unpleasant and stressful decisions are often avoided (e.g organ
donation) and therefore increases the change that the default will be chosen as this is an easier choice (Baron & Ritov 1994).
Finally, defaults frequently represent the current state of states quo, and change normally involves a trade-off. So changes in the default can result in changes in choice (Johnson & Goldstein, 2003). Both the choice to opt-in or to opt-out can influence people’s feelings, especially as mentioned before on the feeling of warm glow. But what will happen to this feeling of warm glow when you have to make repeated choices? So for example what happens when people say repeatedly yes to donating money or what happens when people have to say constantly no because of personal circumstances for instance. Expected is that over time the donations in the opt-out condition stay significantly higher in all decision rounds compared to donations in the opt-in condition as previous research has shown this strong effect. We also believe that an equilibrium will arise after a while in both the opt-in as the opt-out condition as people will figure out the nudge after they have been presented with the same choice repeatedly (John et al., 2011). Hence, the second and third hypotheses is: H2: Over time, the opt-out condition will generate a larger percentage of donations compared to the opt-in condition in all 10 decision rounds.
H3: In the long run there will be an equilibrium, but the significant difference between opt-in and opt-out will remain.
Repetition effects
example, consumers might experience reputational benefits from the image they create about themselves when making those choices (Berger & Heath 2007; Griskevicus et al. 2007). More recent research shows that consumers may also derive value beyond consumption from
making choices that enhance their self-image. Such motives may especially be important in the area of prosocial choices (Gneezy, Ayelet, Reiner & Nelson, 2012). For example,
listening donors’ names in public newsletters increases donations (Karlan & McConnel, 2012) or recognizing blood donors in a public ceremony increases the frequency of blood donations (Lacetra & Macix, 2010). Also, those motives can explain why people choose to donate or not to donate to a charity organization. When people want to enhance their self image for example the change they they will opt-in for donating or not opt-out for donating increases.
So based on the fact that people will become consistent in their choices because they learn from previous choices we expect that the decision curve will change after the first decision round. After the first decision round we expect that donations in the opt-in condition will increase as those participants want to experience the feeling of warm glow and try to strengthen their self-concept by donating money (Andreoni, 1988; Sachdeva et al., 2009; Jordan et al., 2011). Obviously, this feeling of warm glow will also hold for people in the opt-out condition. However, in contrast with the opt-in condition we expect that in the opt-opt-out condition the amount of donations will decrease after the first decision rounds. The reason for this is that we believe people get irritated after they figure out the nudge. With this we mean that it could happen that people who do not want to donate becoming a donor and this could evoke negative feelings toward the company (Unicef) (Saunders, 2011). Empirical evidence shows that people may see nudges as manipulative, even though choice is preserved, which results in a negative perspective about the default (Brown & Krishna, 2004; Tannenbaum & Ditto, 2014). Because our study is about repeated choices participants with those negative feelings are probably going to choose not to donate after the first decision rounds. As a result, the difference between the amount of donations in the opt-in condition and the opt-out
condition will decrease. Hence, the fourth hypotheses is:
H4: After the first decision round, the donation effect will fast become weaker in the opt-out condition and become stronger in the opt-in condition.
has been proven to be stronger than the opt-in default we also expect that this will continue over time. Below a graphical representation of the hypotheses is visualized (Figure 1).
Figure 1. Expected effects of the influence of type of default on the willingness to donate over time.
Moral Identity
Many studies have already been accomplished to investigate moral identity as a motivator of charitable behaviour and showed sufficient evidence of the influence on donation behaviour (Aquino & Reed, 2002; Reed, Aquino & Levy, 2007; Reyonolds & Ceranic, 2007). The socio cognitive model of moral identity in which an associative network of related moral traits, goals and behaviours represents a person’s moral identity (Witterich, Mittal & Aquino, 2013). Specially, moral identity is defined as: ’moral identity is the extent to which people believe
themselves to be ethical and the degree to which moral traits such as being caring,
compassionate, fair, friendly, generous, helpful, honest and kind are important and central to their self-definition, including their desire to represent this aspect of themselves to others’
(Acquino & Reed, 2002, p. 1424). This means that it serves as a self-regulatory mechanism. (Aquino & Reed, 2002) that drives moral behaviour, mostly when the moral identity is important to one’s self concept or top of mind (Reed, Aquino & Levy, 2007). Moral identity is said to be important regarding ethical behaviour and decision making (Aquino & Reed,
0 20 40 60 80 100 D ona ti ng pe rc ent ag e Time
Repeated choices over time
2002; Weaver 2006). It is positively related to pro-social behaviour but in contrast moral identity is negatively related to unethical behaviour as cheating and selfish actions (Shao, Aquino, & Freeman, 2008).
Moral identity can be divided into two sub-concepts: internalization (MI-I) and symbolization (MI-S). The internalization stands for the degree to which moral characteristics are central one’s self-concepts, in the long-term process of consolidating and embedding one’s private self-concepts, beliefs, attitudes, and values (Aquino & Reed, 2002). Internalization illustrates the importance of having such (moral) characteristics or traits (Aquino & Reed, 2002). People who score high on this dimension are being more concerned with one’s desired self and the associated norms, beliefs and the internal motives will increasingly be affecting the donation intention one’s score on internalization is high. Symbolization however, is the degree to which the traits are reflected in the respondent’s actions concerning social norms and his or her public image (Aquino & Reed, 2002). This is the more public dimension that is concerned with the moral image someone portrays (Reed, Aquino & Levy, 2007). In the symbolization dimension people are more focused on external motives and are concerned about their external moral self. This will increasingly be affecting donation behaviour when one is scoring high on MI-S. So both dimensions are found to positively influence charitable behaviour in their own distinct ways (Aquino & Reed, 2002; Reynolds & Ceranic, 2007). Therefore, both MI-I and MI-S will be taken into account when determining someone’s moral identity.
Ceranic, 2007). People with a high moral identity are motivated to publicly show others aspects of themselves which represent their moral identity (Aquino et al., 2009; Aquino & Reed, 2002). To avoid feelings of guilt, shame, regret or other negative emotions, individuals with higher level of moral identity tent to act in ways that are consistent with their moral identity (Aquino et al., 2009; Aquino & Reed, 2002; Mayer et al, 2012).
In conclusion, ‘people whose self-concept is organized around their moral beliefs are very likely to consistently translate those beliefs into action consistently throughout their lives’ (Damon & Hart, 1992, p. 455). Moral identity may be the most important source of moral motivation and therefore the best predictor of moral actions and commitments (Aquino & Levy, 2007). Literature focussed on charitable moral behaviour concludes that individuals with a high moral identity tend to donate more to charities and behave more prosocial
compared to individuals with a weaker moral identity (Lee, Winterich, & Ross, 2014; Aquino & Levy, 2007; Winterich, Mittal & Ross, 2009). Up until now moral identity has not been investigated in combination with the default effect. Based on previous research we expect that for people with a higher moral identity the initial default effect will be less pronounced
H5: For people with a higher moral identity the default effect will be less pronounced compared with people with a low moral identity.
The proposed conceptual framework is illustrated in Figure 1. It is expected that whenever people are placed in the opt-out condition, this will have a negative influence on the
willingness to donate over time. So donations are expected to decrease over time. However, it is expected that people in the opt-in condition positively influence the relationship between the default effect and the willingness to donate over time and thus donations will increase over time. In this model, it is expected that moral identity positively moderates the
relationship between the default effect and the willingness to donate over time. Note that we will only look at behaviour in this study. In this research the process of feeling the warm glow will not be measured, since we do not want to make people aware of their feelings. Therefore, only the behavioural context of decision making will be taken into account.
RESEARCH DESIGN
The goal of this study is to gain insights and a better understanding of the effect of repeated choices on charity donation behaviour moderated by the influence of moral identity. An experimental setup to gather the data in order to test the hypotheses is used.
Data collection and Research design
A 2 (default: opt-in vs opt-out) Between Subjects x 10 (round T1-T10) Within Subjects experimental design was used to investigate the default effect on repeated donating choices (yes vs no). Repeated measurements were used to determine whether people were more willing to opt-in or opt-out over time. The independent variable was the default effect (opt-in vs opt-out) manipulated between subjects. In other words, participants had to make 10 similar choices within the opt-in system or they had to make 10 similar choices within the opt-out system. The dependent variable was the willingness of the participants to donate to the charity over time. In this research, Unicef was the chosen charity. Moral Identity was used to test the moderating effect between the independent and dependent variable and was used as a continuous predictor.
Procedure
The study was combined with an unrelated study to make up a full hour of research laboratory time. Moral Identity was measured at the very beginning of the lab session, followed by the unrelated study. We did this because we did not want participants to be aware that moral identity was any part of our study. Prior research showed that this could mislead study results. For example, participants who choose to donate 2 Euro to a charity rated themselves as more helpful and less selfish than participants in the control condition which did not had this opportunity to donate (Gneezy et al. 2012). By implementing moral identity in a seemingly different study we wanted to avoid such problems.
When starting the questionnaire participants were told that they were participating in a study to test their cognitive capacity in series of short tests. Participants learned that 1 out of 10 people were actually receiving this money at the end of the study period, and that this was determined by means of a lottery. Note that the choices of people therefore were actually influencing their payment. Specially, 1 out of 10 would be selected and be paid out according to their choices made in the survey. In this introduction participants were told that we work together with Unicef and that they therefore had the opportunity to donate part of their earnings to this charity. Nothing was told about the fact that participants needed to make this decision repeatedly. This was done to avoid that respondents would get aware of the actual purpose and nudge of the study which may bias the results.
After participants read the instructions they started with a task as a means to earn money. This task was a form of a cognitive game like word search, cubes puzzles and solving
first tasks and receiving 1 Euro for that part, participants were given the opportunity to choose whether they would like to donate 20% of their earnings to Unicef in two different conditions. Choosing a low amount as the default will lower the bar for donations and allowing people to feel good about donating, effectively getting the warm glow of giving. So low default may increase participation (Andreoni, 1990). Randomly participants were assigned to either the opt-out condition or the opt-in condition. In the opt-out condition participants received the following message:
The 2 minutes for this task is over. You earned 1 Euro with completing this task.
As indicated, the FEB Research Lab works together with Unicef. We therefore donate 20% of this task's earnings to Unicef.
If you do not want to donate 20% of your earnings to Unicef, please tick the box below. Otherwise simply continue.
0 No, ‘I do not want to make this donation’.
So in the opt-out condition people needed to take action whenever they did not want to donate their money to Unicef. In contrast, in the opt-in condition people needed to take action
whenever they did want to make a donation. The participants in this condition where presented with the following message:
The 2 minutes of this task are over. You earned 1 Euro with completing this task.
As indicated the FEB Research Lab works together with Unicef. If you would like to donate 20% of your earnings to Unicef, please tick the box below. Otherwise simply continue.
O ‘Yes, I would like to make this donation’.
demographic questions were asked to participants and the questionnaire was closed with a debriefing of the study.
Variable operationalization
Moral Identity.
Moral identity was measured according the 10-item self importance of moral identity scale originally developed by Aquino and Reed (2002). This scale consists of two 5-item subscales (see appendix I) namely internalization (the degree to which the moral traits are central to the participant’s self concept) and symbolization (the extent to which participants outwardly display a social identity based on the moral traits). Respondents were presented with a list of 9 moral characteristics and have been asked to imagine to be a person with those
characteristics while responding to 10 statements on a rating scale from 1 (completely disagree) to 7 (completely agree). An example item of MI-I measure is ‘It would make me feel good to be a person who has these characteristics’ and for MI-S measure is ‘I often wear clothed that identify me as having these characteristics’. The Cronbach’s alpha for the total Moral Identity including internalization and symbolization was 0.745. For MI-I the
Cronbach’s alpha was 0.760 and for MI-S the Cronbach’s alpha was 0.741. So the reliability of this measurement can be guaranteed. (Hardy, Bhattacharjee, Reed & Aquino, 2010)
Donation behaviour.
The willingness to donate was measured by asking people whether they were willing to donate part of the received money to Unicef in either the opt-out or opt-in condition. (yes/no) In order to make participants to repeat their choices they had to decide to donate or not to donate, 10 times. After each round the participants were asked to donate 20 percent to Unicef. In the opt-out condition the participants needed to click on a button NOT to donate or proceed with the questionnaire (default = donating). In the opt-in condition participants needed to click on a button to donate or proceed with the questionnaire (default = not donating).
Method of Analysis
Data gathered via Qualtrics in the Feb research laboratory was transferred into SPSS to statistically test the stated hypothesis. Before testing the actual hypotheses, the responses to the manipulation check had to be examined, two items of moral identity needed to be reversed and some variable transformations had to be carried out. Next, the reliability of the moral identity scale was measured by calculating the Cronbach’s Alpha coefficients. Then, the descriptive statistics of the different variables were investigated by calculating means and standard deviations. In order to test the hypotheses a repeated measures ANOVA including a Between subject factor (default) was conducted to determine the main effect and the
interaction effect. This allowed to test H1-4.
To test whether moral identity had a moderating effect between the default and the
RESULTS
Descriptive Statistics
In total 247 respondents were taking into account for testing the hypotheses. Six respondents failed to check the correct boxed in the manipulation check. In order to make the data more reliable those participants were excluded from the analyses, resulting in a sample of 242 participants (154(65%) females and 88(36%) males; mean age= 21.66, SD=2.83). Of the 242 participants, 122 were classified in the opt-in condition and 120 were classified in the opt-out condition. In total 1047 donations were made by the 242 participants. On average,
respondents donated 4 out of 10 times to Unicef (M=4.30, SD=4.42). Table 1 represents the donation outcomes of the study.
Table 1. Frequency of donations.
Number of times
donated (min 0, max 10)
Frequency of people donating
0 99 (40.9%) 1 11 (4.5%) 2 11 (4.5%) 3 5 (2.1%) 4 9 (3.7%) 5 8 (3.3%) 6 5 (2.1%) 7 n.a. 8 13 (5.4%) 9 11 (4.5%) 10 69 (28.5%)
SD=4.15). Also in this condition it is remarkable that 46.7% donated not once and 19.7% donated 10 times in a row.
Demographics
Interesting results were found when comparing the gender of the respondents. An ANOVA was performed to compare the means of females and males in the different conditions on their donation behaviour. Here, we tested whether the percentage of donations was higher for males or for females. In the opt-in condition male respondents donated more often compared to females (Mmales=4.08, SD=4.52 Mfemales=3.18, SD=3.89, p=.000). In the opt-out condition
females donaed more often compared to males (Mmales=4.55, SD=4.73, Mfemales=5.47,
SD=4.46, p=.000).
The Default effect on repeated choices
However, as predicted, a significant difference was found between the two conditions opt-in and opt-out (F= (1, 1) =8.77, p=.003). Over time, participants in the opt-out condition donated significantly more often than participants in the opt-in condition. (F (1) =122,64, p=.000). In all of the 10 decision rounds people donated less in the opt-in condition than in the opt-out condition. In the opt-out condition respondents are donated more often to Unicef (Moptout
=5.20, SD=4.55) than in the opt-in condition (Moptin = 3.53, SD=4,15).
Figure 3: Results default effect on repeated donation over time.
Moral Identity
In general, respondents reported rather high moral identity scores (Minternalization=5.72, SD
=0.90; Msymbolization=4.36, SD=1.03). A median split was used (Medianinternalization = 5.80;
Mediansymbolization=4.40) to separate low morality and high morality in equal groups. For
symbolization, the 18 respondents who scored 4.40 were treated as high MI-S and for internalization the 21 respondents who scored 5.80 were treated as MI-I. Table 2 represents the descriptive statistics of respondents classified in the high or low morality group.
0 0,1 0,2 0,3 0,4 0,5 0,6 D ona ti ng pe rc ent ag e Time
Repeated choices over time
Table 2. Descriptive statistics symbolization and internalization.
High morality Low morality
Internalization N= 141, M=6.32, (SD=.38) N=100, M=4.89, (SD=.70)
Figure 4. Plots internalization* default * time and symbolization * default * time *1 = low moral identity, 2= high moral identity
In sum
Table 3. Hypotheses testing.
DISCUSSION
The current study tested the effect of the default on the willingness to donate over time. In line with the predictions, in the opt-out conditions was shown to be superior to the opt-in condition with its influence on the willingness to donate. When respondents were presented with the question to donate 20% of their earnings to Unicef with opt-out as the default, they donated more often than respondents which saw this question with opt-in as the default. Those results support the first hypothesis. That people donate more in the opt-out condition compared to the opt-in condition is in line with other research (Pichert & Katsikopoulos 2008; Liksokin 2009; Johnson at al. 1993; Johnson, Bellman & Lohse, 2002). In line with the
expectations, the difference between opt-out and opt-in remained significant over time. So, in all decisions rounds participants in the opt-out condition agreed more often to donate 20% of their earnings than participants in the opt-in condition did. So also for the second hypothesis
Hypothesis Analysis
H1: In the first decision round the opt-out condition will generate a larger percentage of donations compared to the opt-in condition
Supported
H2: Over time, the opt-out condition will generate a larger percentage of donations compared to the opt-in condition in all 10 decision rounds.
Supported
H3: In the long run there will be an equilibrium, but the significant difference between opt-in and opt-out will remain.
Rejected
H4: After the first decision round, the donation effect will fast become weaker in the opt-out condition and become stronger in the opt-in condition.
Rejected
H5: For people with a higher moral identity the default effect will be less pronounced compared with people with a low moral identity.
support is found. This finding contributes to the literature of behavioural decision making as the default effect has not been investigated on repeated choices.
It was also expected that the number of donation would change over time. In the beginning of the decision rounds it was expected that respondents in de opt-out condition would donate less compared to their first decision, and in the opt-in condition it was expected that respondents would donate more compared to their first decision round. However, the results suggest that the default effect has no statistically significant effect on the willingness to donate over time, as no interaction effect was found. Therefore, the results do not support the fourth hypothesis that the effect of the defaults change over time. More specifically, in the opt-out condition it is not proven that the donations decrease after the first few decision rounds. Also, in the opt-in condition it is not proven that donations increase after the first few decision rounds.
The last expectation was that, after a few decision rounds, the participants would figure out the nudge and the donations would become stable over time. But also for our third hypothesis no support was found.
The not significant interaction effect between the default and the willingness to donate over time might be explained by considering the limited resource model of self-control (Vohs et al, 2005). This model states that after exerting self-control, consumer’s resources become
control, but also their self-interest. This could have an influence on people’s pro-social behaviour. Research shows that the more a person gets depleted the less they behave in a pro-social way (Baumeister, Sparks, Stillman & Vohs, 2007). This could explain the 41% of the respondents which did not donated once to Unicef. Another form of depletion effecting people’s choices is the so called ego-depletion (Schimeichel, Vohs & Baumeister, 2003). This form of depletion makes people less intelligent. It mainly impaired performance on tasks that required control, such as logical reasoning. As a consequence, ego depletion made people less likely to compromise which resulted in people choosing the cheapest or easiest option. The reason for this is that ego depleted consumers will be less likely to use their capacity for reasoning and all the information they have in making decisions. Depleted consumers will be satisfied with the easiest option while others will seek compromises to find the optimal solution for their decision (Pocheptsova, Amir, Dhar & Baumeister, 2007). Another
consequence of ego depletion they found in their study was that depleted consumers prefer to choose the option to do nothing. For example: when the do nothing option was included next to the purchase options, ego depleted customers were more likely to choose the do nothing option than others were. This could also explain the high percentages of participants making the same decision 10 times in a row (Pocheptsova, Amir, Dhar & Baumeister, 2007). To overcome this problem, the research needs to be replicated and tested over a longer period of time. By doing so, it is possible to avoid the cognitive tasks participants needed to perform in-between the decisions.
researchers have found that when participants play with laboratory money they make less self-interested choices than when they use money they have earned though performing a task (Cherry et al. 2002; Hoffman & Spitzer 1985; Loomes & Burrows, 1994). This phenomenon is also known as the windfall effect (Clark, 2002). Also in a charitable giving experiment this effect was found (Carslon, He & Martinsson, 2009). Here, participants donated less when they have earned the pay by completing a task compared to the situation in where the money was given to them. Another study found that the more effort was needed to complete those tasks the more donations were made to the given charity (Ariely, Bacha & Meier, 2007). Those findings could indicate why participants chose not to donate once or only donated a few times in our study. Because the difficulty level of our task were quite different among the 10 tasks this could have biased our results in that people who experience the tasks easy donated different than the ones who experience the tasks difficult. Likewise, it is possible that whenever people had the feeling the money was not their belonging they donated more than they would do in real life whenever they had to work to earn the money. As a consequence, people became careless and uninterested when making the donation choices.
Also, experimental studies may be subject to an ‘experimental demand’ effect which can lead to non-significant results (Orne, 1962). This occurs whenever changes in behaviour occur by participants due to cues about what constitutes appropriate behaviour. In this research, it could for instance happen that people start donating because they want to please the experimenter or they think that is what they are supposed to do (Benz & Meier, 2006).
A last explanation for the non-significant results is that the laboratory context is, by
2005). For example, participants who seem to be generous in a situation without much context (laboratory) may behave more pro-socially in context rich (real life) situations (Bardsley, 2005).
The analysis of the final hypothesis does not show any statistically significant moderating effect of moral identity between the default and the willingness to donate over time
.
This is not in line with other literature on moral identity where it was found that moral identity has a moderating effect on the willingness to donate (Jordan, Mullen & Miminhan, 2011;Winterich, Aquino, Mittal, & Zwartz, 2013; Barclay, Whitside, & Acquino, 2014). The non-significant moderating results could be explained by the high overall moral identities. A distinction between high and low moral identity was hard to define. For instance, the mean of low morality of internalization is already 4.89 on a 7-point Likert scale.
MANAGERIAL IMPLICATIONS
It is the end of the month again, time to Donate to Unicef!
If you do not want to donate to Unicef this month then repay with ‘no’. Otherwise, just ignore this message.
We appreciate your donation. Kind Regards,
Team Unicef.
Additional research in this area of repeated choices could help to development more effective marketing strategies for increasing the willingness to donate to a charity program. This can lead to a contribution of the overall organizational performance.
LIMITATIONS AND FUTURE RESEARCH
Due to lack of time and mandatory deadlines in this research, the data collection could only take place in a time frame of two weeks. This means that we could only ask for 10 decision rounds per respondent in a time frame of 30 minutes. Therefore, the time between decisions was only 2 minutes. To increase the probability for more reliable results this research needs to be done with longer intervals between the decision rounds. Remember: Unicef sends a
donation reminder once a month. It can be assumed that a study with repeated choices every four weeks will have more reliable result. By doing so, it can be avoided that people base their choices on the level of difficulty they experienced in performing the tasks. It might also be interesting to investigate some underlying factors which could influence consumer’s repeated decisions, besides the default effect, like someone’s familiarity with the organization, the awareness of the organization, negative attitudes towards the default, priming in the advertisement, the influence of the difficulty level of the tasks, etc.
An important limitation of this research is the level of education: all respondents were
education level as they might perceive the value of donating 20% of 1 Euro differently (Kasri, 2013) Research has shown that people with a higher education are more generous. This generosity of people with a higher education can be explained by their larger financial resources, and stronger verbal abilities. More generous people are more likely to donate money to a charity and to donate a larger amount of money (Wiepkring & Maas, 2009): people with a higher education level will make more charitable donations than people with a lower education level (Turcotte, 2012). It would be expected that education would have moderated the default effect and time in that higher educated people are making more conscious choices. Also, because of the intelligence difference between lower and higher educated people it is expected that higher educated people will figure out the nudge faster than lower educated people. As a result, the decision curve will be different for both groups.
Thirdly, apart from education, age could also be a limitation of this research. As the average age of the respondents was 21, it can be assumed that they are still studying and do not have a stable or high income: such participants could have different donation behaviours than
lower bar effect, which indicates that more people will donate money when the default
amount is relatively low (Goswani & Urminsky, 2016). Because only 1 out of 10 participants received the extra money and from those 10 the remaining money was donated to Unicef, it is possible that participants felt that they did not actually donated the money. As people are more willing to take risks and donate more money when they do not ‘feel’ it in their own wallet this could have limited our results (Thaler & Johnson, 1990). A solution for the above limitations should be replication with respondents with different educational levels and different ages.
A fourth limitation is the feeling of intrusiveness. In the late nineties, the so-called permission marketing was introduced (Seth Godin, 1999). It was advised to request customer’s
permission before sending them promotional messages. This type of marketing creates an opportunity for two-way interaction and engagement, which nowadays is essential for creation of firm value (Kumar et al., 2014). Customer’s interest in a permission marketing program is positively related to the customer’s level of participation in the program
faster in the opt-out condition as people are automatically subscribed for a donation without anyone asked them for approval to do so. Also, a moderation is expected as irritation is the main cause for intrusiveness feelings (Edwards, Li & Lee, 2002). It could be likely that people get irritated after they have been exposed to the same question in a rather short time. We expect irritation to arise after a few decision rounds. This irritation will then convert into feeling of intrusiveness and will eventually decrease the willingness to donate over time. Future research could add the feeling of intrusiveness as a moderating variable to verify those assumptions.
CONCLUSION
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APPENDIX
Appendix I. Moral Identity Measure Aquino and Reed (2002).
‘Listed below are some characteristics that might describe a person: caring, compassionate, fair, friendly, generous, helpful, hardworking, honest and kind’.
‘The person with these characteristics could be you or it could be someone else. For a moment, visualize in your mind the kind of person who had these characteristics. Image how that person would think, feel and act. When you have a clear image of what this person would be like, answer the following questions’.
1 internalized It would make me feel good to be a person who has these characteristics.
2 internalized Being someone who has these characteristics is an important part of who I am.
3 Socialization I often wear clothes that identify me as having these characteristic.
4 internalized I would be ashamed to be a person who had these characteristics.
5 Socialization The types of thing I do in my spare time (e.g. hobbies) clearly identify me as having these characteristics.
6 Socialization The kinds of books and magazines that I read identify me as having these characteristics.
7 internalized Having these characteristics is not really important to me. 8 Socialization The fact that I have these characteristics is communicated to
others by membership in certain organizations.
9 Socialization I am actively involved in activities that communicate to others that I have these characteristics.
