Heuristics and Biases in Retirement Savings Behavior

Journal of Economic Perspectives - Tập 21 Số 3 - Trang 81-104 - 2007
Shlomo Benartzi1, Richard H. Thaler2
1Professor and Co-Chair of the Behavioral Decision-Making Group, Anderson School of Management, University of California, Los Angeles, California.
2Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics, and Director of the Center for Decision Research, Graduate School of Business, University of Chicago, Chicago, Illinois.

Tóm tắt

Standard economic theories of saving implicitly assume that households have the cognitive ability to solve the relevant optimization problem and the willpower to execute the optimal plan. Both of the implicit assumptions are suspect. Even among economists, few spend much time calculating a personal optimal savings rate. Instead, most people cope by adopting simple heuristics, or rules of thumb. In this paper, we investigate both the heuristics and the biases that emerge in the area of retirement savings. We examine the decisions employees make about whether to join a savings plan, how much to contribute, and how to invest. Saving for retirement is a difficult problem, and most employees have little training upon which to draw in making the relevant decisions. Perhaps as a result, investors are relatively passive. They are slow to join advantageous plans; they make infrequent changes; and they adopt naive diversification strategies. In short, they need all the help they can get. We discuss the possible role of interventions aiming to improve retirement decision making. Fortunately, many effective ways to help participants are also the least costly interventions: namely, small changes in plan design, sensible default options, and opportunities to increase savings rates and rebalance portfolios automatically.

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Thông tin
Thông tin xuất bản

Journal of Economic Perspectives

Tập 21 Số 3

81-104

Thông tin tác giả