If you think that Nudge doesn’t matter, take a look at marriage. Only 5-10% of marriages have prenups; everyone else goes with the “default option” – the family law of the state in which they reside.
Why do people go with state law? You could say, “State laws are so wisely crafted that no one would want anything else,” but that’s laughable. The real reasons, as Heather Mahar explains, are (a) people underestimate their probability of divorce, so they barely plan for a likely event, and (b) asking for anything other than the default option is a bad signal:
[A]lthough respondents to her survey correctly identified the national divorce rate at approximately 50 percent, they believed their own chance of divorcing was just 11.7 percent. The more optimistic a respondent was about the enduring success of his or her marriage, the less likely he or she was to consider requesting a prenuptial agreement. “Just like everyone thinks they’re a better-than-average driver, everyone thinks that there’s no way their marriage will end in divorce,” says Mahar.
Fear of what she calls “signaling” was also prominent: 62 percent of those surveyed thought that requesting a prenuptial agreement sends a negative signal about the future of the marriage.
One solution to the family law mess is simply to improve the default rules. The problem, though, is that there is bitter disagreement about how the default rules should be changed. Many, like Ann Crittenden in The Price of Motherhood, frankly admit that their main goal is “a massive shift of income to women,” but men’s rights advocates want something rather different. A totally different – and far less conflictual – approach is for state governments to get out of the business of writing default rules for marriage.
When the state provides a default, a request for negotiation is a bad signal. But if there’s no default rule, the stigma of asking for a prenup goes away; a marriage proposal is a request to write a prenup. So why not replace the mess we have with simple contract law? Custody, property division, alimony, child support – wouldn’t you rather work these out in advance than trust your state legislators and judges to figure out what’s best for your family?
Even if you don’t want to get the state entirely out of marriage, there’s still no reason why a state marriage license shouldn’t have a simple list of checkboxes spelling out the terms of dissolution. Alternately, in the true spirit of Nudge, states could re-label prenups as “the default option,” and require people to affirmatively request to have their marriage governed by state law.
Question for you: If everyone had a prenup, what would the terms of the typical contract look like?