By default

Steve Lohr has an article in The New York Times about Google:

In the wide-open Web, choice and competition are said to be merely “one click away”, to use Google’s favorite phrase. But, in practice, the power of digital distribution channels, default product settings and traditional human behavior often matters most.
In a Senate hearing last month about Google, Jeremy Stoppelman, the chief executive of Yelp, pointed to that reality in his testimony: “If competition really were just ‘one click away,’ as Google suggests,” he said, “why have they invested so heavily to be the default choice on web browsers and mobile phones? Clearly,” he added, “they are not taking any chances.”
Indeed, Google made a big bet early in its history: In 2002, it reached a deal with AOL, guaranteeing a payment of fifty million dollars to come from advertising revenue if AOL made Google its automatic first-choice search engine: the one shown to users by default. Today, Google pays an estimated hundred million a year to Mozilla, coming from shared ad revenue, to be the default search engine on Mozilla’s popular Firefox web browser in the United States and other countries. Google has many such arrangements with websites.
Most economists agree that Google’s default deals aren’t anti-competitive. Rivals like Bing, the general search engine from Microsoft, and partial competitors like Yelp, an online review and listing service for local businesses, have their own websites and other paths of distribution. Choice, in theory, is one click away. But most people, of course, never make that single click. Defaults win.
The role of defaults in steering decisions is by no means confined to the online world. For behavioral economists, psychologists and marketers, defaults are part of a rich field of study that explores “decision architecture”: how a choice is presented or framed. The field has been popularized by the 2008 book Nudge, by Richard H. Thaler, an economist at the University of Chicago and a frequent contributor to the Sunday Business section, and Cass R. Sunstein, a Harvard Law School professor who is now on leave, working for the Obama administration. Nudges are default choices.
In decision-making, examples of the default preference abound: workers are far more likely to save in retirement plans if enrollment is the automatic option. And the percentage of pregnant women tested for HIV in some African nations where AIDS is widespread has surged since the test became a regular prenatal procedure and women had to opt out if they didn’t want it.
A study published in 2003 showed that, while large majorities of Americans approved of organ donations, only about a quarter consented to donate their own. By contrast, nearly all Austrians, French, and Portuguese consent to donate theirs. The default explains the difference. In the United States, people must choose to become an organ donor. In much of Europe, people must choose not to donate.
Defaults, according to economists and psychologists, frame how a person is presented with a choice. But they say there are other forces that make the default path hard to resist. One is natural human inertia, or laziness, that favors making the quick, easy choice instead of exerting the mental energy to make a different one. Another, they say, is that most people perceive a default as an authoritative recommendation. “All those work, and that is why defaults are so powerful,” says Eric J. Johnson, a professor at the Columbia Business School and co-director of the university’s Center for Decision Sciences.
The default values built into product designs can be particularly potent in the infinitely malleable medium of software, and on the internet, where a software product or service can be constantly fine-tuned. “Computing allows you to slice and dice choices in so many ways,” says Ben Shneiderman, a computer scientist at the University of Maryland. “Those design choices also shape our social, cultural and economic choices in ways most people don’t appreciate or understand.”
Default design choices play a central role in the debate over the privacy issues raised by marketers’ tracking of online consumer behavior. The Federal Trade Commission is considering what rules should limit how much online personal information marketers can collect, hold, and pass along to other marketers, and whether those rules should be government regulations or self-regulatory guidelines.
Privacy advocates want tighter curbs on gathering online behavioral data, and want marketers to have to ask consumers to collect and share their information, presumably in exchange for discount offers or extra services. Advertisers want a fairly free hand to track online behavior, and to cut back only if consumers choose to opt out.
New research by a team at Carnegie Mellon University suggests the difficulty that ordinary users have in changing the default settings on internet browsers or in configuring software tools for greater online privacy. The project, called Why Johnny Can’t Opt Out, has just been completed and the results have not yet been published. Forty-five people of various backgrounds and ages in the Pittsburgh area were recruited for the study. To qualify as research subjects, they had to be frequent internet users and express an interest in learning about protecting their privacy online. Each was interviewed for ninety minutes, and each watched a video showing how online behavioral advertising works. Then each person was given a laptop computer and told to set privacy settings as he or she preferred, using one of nine online tools. The tools included the privacy options on browsers like Mozilla Firefox and Microsoft’s Internet Explorer, and online programs like Ghostery and Adblock Plus, as well as Consumer Choice from the Digital Advertising Alliance. The privacy tools typically proved too complicated and confusing to serve the needs of rank-and-file Internet users.
“The settings they chose didn’t block as much as they thought they were blocking, often blocking nothing,” says Lorrie Faith Cranor, a computer scientist at Carnegie Mellon who led the research. Cranor says the research points to the need to simplify privacy software to few choices. “If you turn it on, it should be pretty privacy-protective,” she says. “The defaults are crucial.”

Rico says it's fitting that CMU should have been the test site for this; he used to hang out with Ted Kaehler in the computer department there before Ted left for Xerox PARC.