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NowInStock. net é um participante no Amazon Services LLC Associates Program, um programa de publicidade afiliada projetado para fornecer um meio para que os sites ganhem taxas publicitárias através de publicidade e vinculação para Amazon. O papel da economia comportamental e tomada de decisão comportamental em decisões de poupança para aposentadorias estadunidenses A teoria econômica tradicional postula que as pessoas fazem decisões ao maximizar uma função de utilidade na qual todas as restrições e preferências relevantes são incluídas e pesadas adequadamente. Economistas comportamentais e pesquisadores decisórios, no entanto, estão interessados em como as pessoas tomam decisões em face de informações incompletas, recursos cognitivos limitados e vieses de decisão. Os achados empíricos nas áreas de economia comportamental e julgamento e tomada de decisão (JDM) demonstram a ausência da noção de que o homem é economicamente racional, o que ilustra, em vez disso, que as pessoas geralmente agem de maneiras economicamente subóptimas. Este artigo descreve as descobertas do JDM e as literaturas de economia comportamental que destacam os muitos impedimentos comportamentais para a poupança que os indivíduos podem encontrar no caminho da segurança financeira. Eu discuto como as questões comportamentais e psicológicas, como o autocontrole, as emoções e a arquitetura de escolha, podem ajudar os responsáveis políticos a entender quais fatores, além dos puramente econômicos, podem afetar o comportamento da poupança individual. O autor está com o Office of Retirement Policy, o Office of Retirement and Disability Policy, a Administração da Segurança Social. Agradecimentos. O autor gostaria de agradecer a Barbara Smith, Kirstin Appelt, Chris Anguelov, Dave Shoffner, Anya Olsen, Kevin Whitman, John Phillips, Hal Arkes, David Weaver e Jason Fichtner por seus comentários pensativos sobre rascunhos anteriores deste artigo. As conclusões e conclusões apresentadas no Boletim são as dos autores e não representam necessariamente as opiniões da Administração da Segurança Social. Introdução Administração da Segurança Social A teoria econômica tradicional postula que as pessoas tomam decisões ao maximizar uma função de utilidade na qual todas as restrições e preferências relevantes são incluídas e pesadas adequadamente (Simon 1959). A teoria tradicional assume que os indivíduos têm informações completas e são capazes de processar essa informação, que os indivíduos são decisores racionais e que as preferências individuais são bem definidas e constantes ao longo do tempo (Becker, 1962 Thaler, 1990). Os economistas comportamentais e os pesquisadores de tomada de decisão questionam esses pressupostos e estão interessados em como as pessoas tomam decisões diante de informações incompletas, recursos cognitivos limitados e os vieses de decisão a que os indivíduos muitas vezes são presas (por exemplo, Thaler 1990, 1999). Tversky e Kahneman 1974). Os achados empíricos nas áreas de julgamento e tomada de decisão (JDM) e economia comportamental partem da noção de homem como economicamente racional, o que ilustra, em vez disso, que as pessoas geralmente agem de maneiras economicamente subóptimas. Este artigo descreve as descobertas do JDM e as literaturas de economia comportamental que se concentram em elementos da decisão de poupança de aposentadoria. A realidade que enfrenta os trabalhadores de hoje, segundo o qual a Segurança Social, nem a intenção de constituir a totalidade dos rendimentos de aposentadoria dos trabalhadores dos EUA (DeWitt, 1996), enfatizou a importância da responsabilidade financeira pessoal. O número crescente de empregadores que oferecem planos de aposentadoria de contribuição definida, como 401 (k) s, além de, ou em vez de, planos tradicionais de benefício definido ou previdência (EBRI 2007) ressalta ainda mais o papel do indivíduo no planejamento para seu futuro Bem-estar financeiro. Infelizmente, os trabalhadores enfrentam uma multiplicidade de problemas ao fazer todos os tipos de decisões, simples e complexas. Pesquisa em JDM e economia comportamental 1 oferece informações sobre como os indivíduos podem se comportar ao decidir se, como e quando salvar para aposentadoria. Este artigo destaca os principais achados da JDM e da economia comportamental cujas implicações podem ajudar os formuladores de políticas a entender quais fatores, além dos puramente econômicos, podem afetar o comportamento da poupança individual. Os conceitos analisados abaixo se enquadram vagamente em quatro categorias: questões informativas, heurísticas e preconceitos, escolha intertemporal e contexto de decisão (Figura 1). Cada uma dessas categorias representa uma classe de impedimentos potenciais para o bem-estar financeiro futuro. Figura 1. Fatores selecionados que afetam o comportamento da poupança dos indivíduos Aversão à ambiguidade Evidências anedóticas Heurísticas e preconceitos Regras Pauta status quo Efeitos padrão Autocontrole Procrastinação Desempenho hiperbólico Emoções Dependência de referência Escolha de bracketing Efeitos de enquadramento Escolha de arquitetura A primeira categoria trata de questões informativas, como a ambigüidade Aversão (a tendência de evitar decisões quando algumas informações relevantes são desconhecidas ou incertas) e um excesso de evidência anedótica. Mesmo que os tomadores de decisão tivessem informações completas e precisas, no entanto, descobertas empíricas sugerem que ainda fariam decisões de poupança sub-óptimas como resultado de questões relacionadas à segunda categoria, heurísticas e preconceitos. A tendência para que os indivíduos respaldem desproporcionalmente a alternativa do status quo (viés de status quo) e a influência sistemática da opção padrão na escolha (efeitos padrão) são anomalias ou desvios não contabilizados pelos modelos econômicos tradicionais. Além disso, os indivíduos usam heurísticas ou regras básicas. Que geralmente são benéficas, mas podem levar os decisores a se desviarem. A terceira categoria, a escolha intertemporal, envolve questões de autocontrole. Procrastinação . Desconto hiperbólico (isto é, uma mudança de preferência como um evento futuro se aproxima) e emoções que podem afetar o comportamento da poupança. Finalmente, JDM e pesquisa de economia comportamental demonstram o impacto do contexto de decisão na escolha, essa pesquisa destaca como a dependência de referência e as mudanças simples na forma como as opções são apresentadas, consideradas ou organizadas (escolha de bracketing, efeitos de enquadramento e arquitetura de escolha) podem ter Efeitos profundos sobre as escolhas que os indivíduos fazem em última análise. A consciência desses e de outros conceitos comportamentais pode ajudar os formuladores de políticas a antecipar e a planejar respostas comportamentais potenciais não contabilizadas nos modelos econômicos tradicionais. Esta revisão da literatura consiste em três seções principais. O primeiro descreve por que JDM e pesquisa de economia comportamental é importante para a compreensão do comportamento da poupança, particularmente no clima econômico atual. O segundo descreve as descobertas da JDM e da economia comportamental que se enquadram nas quatro categorias delineadas acima, citando pesquisas relevantes e suas implicações para a decisão de poupança. O terceiro oferece algumas orientações para futuras pesquisas na aplicação de JDM e economia comportamental ao estudo da poupança de aposentadoria. A relevância da economia comportamental e do JDM no clima de poupança atual Mesmo quando os americanos estão sendo chamados a assumir o controle de seu bem-estar financeiro para aposentadoria, estudos demonstraram que as pessoas nem sempre atuam em seu próprio interesse. Uma riqueza de JDM e pesquisa de economia comportamental demonstra uma desconexão entre intenções e comportamento (por exemplo, Loewenstein 1996 Mitchell e Utkus 2003 Thaler e Shefrin, 1981), e entre fazer o que devemos fazer e o que queremos fazer (por exemplo, OConnor e outros 2002). A pesquisa de pesquisa sobre economia de aposentadoria sugere uma desconexão semelhante. Por exemplo, em 2001, 82% dos inquiridos de uma pesquisa da Consumer Federation of America e do Bank of America informaram que gostariam de economizar dinheiro e de cobrir a riqueza pessoal, mas 60% sentiram que a afirmação não penso que estou economizando o suficiente para O futuro descreveu-os bem ou muito bem (CFA BOA 2001). Os americanos parecem querer tomar decisões financeiras sólidas: querem gastar menos e economizar mais. No entanto, as economias reais dos EUA representam menos de 5% de sua renda disponível. 2 Além disso, cerca de 75 por cento dos inquiridos da Pesquisa de Saúde e Aposentadoria de 1996 sentiram que não haviam economizado o suficiente para a aposentadoria e economizariam mais se pudessem começar de novo (NIA, 2007). A pesquisa em economia comportamental e tomada de decisão comportamental procura explicar por que os indivíduos geralmente tomam decisões sub-óptimas, mesmo quando têm boas intenções. A recente desaceleração econômica tem levado muitos investidores a se preocupar com suas economias de aposentadoria (EBRI 2009). Indivíduos fortemente investidos em ações foram mais atingidos, e uma porcentagem significativa de investidores mais antigos está entre esse grupo. Um relatório de fevereiro de 2009 do Employee Benefit Research Institute (EBRI) indicou que quase um quarto (22 por cento) daqueles com idade 56ndash65 incluídos no banco de dados do Instituto de Investimento EBRI Investment Database 401 (k) tinham 90 por cento ou mais de seus ativos investidos em ações. Mais 21% dos participantes desse grupo etário tiveram entre 70% e 90% de seus investimentos em ações (VanDerhei 2009). Os investidores são freqüentemente encorajados a redistribuir alguns de seus investimentos de aposentadoria para perspectivas menos arriscadas à medida que envelhecem 3, a mudança de alocação recomendada ajuda a garantir que um possível declínio do mercado de ações não reduza drasticamente seus fundos de aposentadoria. Com essas recomendações, por que os investidores mais velhos com mais de 200 mil em poupança de aposentadoria 4 no final de 2007 perdem mais de 25% desses fundos em 2008 (VanDerhei 2009). Uma resposta óbvia é que esses investidores não conheciam a recomendação , Ou faltava confiança para agir se o fizessem. Dadas as complexidades envolvidas na determinação da alocação ótima de investimentos de aposentadoria, não se deve esperar que os investidores médios formularão o quotshift na equidade por sua própria regra. No entanto, com a tendência para os planos de contribuição definida e o aumento resultante da responsabilidade pessoal para o planejamento de aposentadoria, a questão da alfabetização financeira recebeu mais atenção nos últimos anos. Além disso, 401 (k) s e ativos de ações não são as únicas áreas em que os consumidores devem navegar por sistemas financeiros cada vez mais complicados, muitas vezes em detrimento de eles. Pesquisas anteriores mostraram, por exemplo, que os indivíduos causam erros financeiros quando lidam com taxas de cartão de crédito e pagamentos de juros, empréstimos de carro, hipotecas e linhas de crédito de equidade do imóvel, para citar alguns (Agarwal e outros, 2006). Muitas instituições, públicas e privadas, intensificaram seus esforços para educar pessoas de todas as idades em vários aspectos do seu bem-estar financeiro. 5 Embora o reforço da literacia financeira seja um passo importante, o conhecimento melhorado pode não garantir decisões financeiras sólidas. A pesquisa sugere que mesmo especialistas com vasto conhecimento em um domínio específico não são imunes a julgamentos e decisões errados nesse domínio (Hutton and Klein 1999 Shanteau 1988 Shanteau e Stewart, 1992). Conforme explicado abaixo, podem surgir inúmeros impedimentos para a tomada de decisões sólidas apesar de informações completas e precisas. Economia comportamental, JDM. E a decisão de poupança Esta seção discute os resultados do JDM e as literaturas de economia comportamental que podem ajudar a explicar os fatores que afetam as decisões de poupança de aposentadoria dos americanos. As quatro categorias destacadas abaixo englobam obstáculos potenciais para economias de aposentadoria ótimas e aspectos do processo de tomada de decisão que não são reconhecidos pela teoria econômica tradicional. O Impacto da Informação Incompleta e Errosa na Pesquisa de Comportamento de Poupança em JDM e economia comportamental sugere que a quantidade, a fonte e a natureza das informações que os indivíduos recebem sobre a poupança provavelmente influenciarão as decisões de poupança. Embora o recente impulso para melhorar a literacia financeira para todos os americanos é um passo positivo para uma melhor tomada de decisão financeira, a pesquisa sugere que um maior conhecimento não resulta necessariamente em uma tomada de decisão mais ótima (por exemplo, Shanteau e Stewart, 1992). Além disso, a literacia financeira está longe de ser universal nos Estados Unidos atualmente, muitas pessoas não entendem nem os conceitos financeiros mais básicos. Por exemplo, usando um módulo inserido na Pesquisa de Saúde e Aposentadoria de 2004, Lusardi e Mitchell (2005) descobriram que apenas cerca de metade de uma amostra nacionalmente representativa de entrevistados com idade igual ou superior a 50 anos conseguiu responder a questões simples sobre a combinação de juros e inflação. Consistente com a noção de que a falta de conhecimento financeiro pode resultar em poucas decisões de poupança para aposentadoria (Olsen e Whitman 2007), Lusardi e Mitchell observaram que os entrevistados que conheciam mais informações financeiras também eram mais propensos a se envolver em planejamento financeiro. Aversão e competência de ambiguidade. Lusardi e Mitchells (2005) descobriram que um maior conhecimento financeiro e participação no planejamento financeiro estavam positivamente relacionados, ressalta a conexão entre informação, intenções e comportamento. Incluído no questionário de Lusardi e Mitchells foram questões sobre os preparativos financeiros dos participantes para a aposentadoria: se os participantes já calcularam o quanto eles precisariam economizar para a aposentadoria, se eles alguma vez desenvolveram um plano de poupança para aposentadoria e quais ferramentas (como on-line Calculadoras ou planilhas) que costumavam planejar a aposentadoria. O questionário também incluiu uma medida de alfabetização financeira para avaliar a conscientização dos inquiridos sobre os conceitos fundamentais necessários para planejar o futuro bem-estar financeiro. A avaliação da literacia financeira sugeriu que muitas pessoas não possuem conhecimentos adequados para se engajar em um planejamento sólido. Poderia essa falta de conhecimento impedir que as pessoas tentassem planejar a aposentadoria. A pesquisa sobre decisões sob ignorância demonstrou que o tipo e a quantidade de informações que os indivíduos recebem podem, de fato, paralisar o processo de tomada de decisão. Por exemplo, a pesquisa mostrou que as pessoas preferem opções para as quais os riscos são conhecidos por opções para as quais os riscos são desconhecidos ou não especificados, uma tendência marcada como aversão à ambiguidade. 6 Um fluxo de pesquisa emergente da literatura de aversão à ambiguidade investiga a hipótese de competência que é, como a competência ou conhecimento em um domínio relevante afeta as preferências dos indivíduos. Por exemplo, Heath e Tversky (1991) descobriram, contrariamente à hipótese de aversão à ambiguidade, que os participantes não preferiam uma opção com riscos conhecidos para uma opção com riscos ambíguos quando as opções ocorriam dentro de um domínio familiar. Em uma de suas experiências, os participantes que conheciam o futebol (ou a política) preferiram apostar em suas crenças sobre o resultado de um jogo de futebol (ou uma eleição presidencial) para apostar em um evento casual com uma probabilidade igual. No entanto, os participantes que sabiam pouco sobre futebol (ou política) preferiam apostar em um evento casual, e não no resultado do jogo (ou eleição). Fox e Tversky (1995) e Fox e Weber (2002) sugerem que este padrão de descobertas é baseado na ignorância comparativa. A hipótese comparativa de ignorância postula que quando os indivíduos enfrentam uma escolha, eles comparam seu nível de conhecimento no domínio relevante com seu conhecimento em outros domínios ou com outros conhecimentos no domínio relevante. Esta comparação, por sua vez, produz sentimentos de competência ou ignorância quando um sentimento de ignorância resulta, as pessoas julgam a situação como ambíguas e procuram evitá-la. Especificamente, Fox e Tversky (1995, 587) argumentam que a confiança dos quotpeals é prejudicada quando contrastam seus conhecimentos limitados sobre um evento com seu conhecimento superior sobre outro evento ou quando se comparam com indivíduos mais experientes. As hipóteses de competência e ignorância comparativa Sugerem que a aversão à ambiguidade surge de sentimentos de inadequação em um domínio particular. Assim, a incerteza sobre questões econômicas pode levar os indivíduos a evitar a tomada de decisões financeiras completamente. Lusardi e Mitchell (2005, 2007) realizaram pesquisas sobre a propensão dos indivíduos para se envolverem em planejamento financeiro que suporte de forma independente essas hipóteses. Além de descobrir que o conhecimento financeiro impactou o envolvimento dos entrevistados no planejamento financeiro, os autores descobriram que a confiança dos indivíduos com o planejamento de aposentadoria afetou sua probabilidade de participar de atividades de planejamento financeiro. Especificamente, Lusardi e Mitchell (2005) descobriram que os participantes que responderam quotdont knowchot às questões de literacia financeira eram muito menos propensos a se envolver em planejamento de aposentadoria do que aqueles que simplesmente deram respostas incorretas. Assim, embora os autores não tenham se empenhado em testar as hipóteses de competência e ignorância comparativa, suas descobertas sustentam as hipóteses de que os indivíduos que não têm confiança no domínio relevante (neste caso, planejamento financeiro) tendem a evitar tomar decisões. As hipóteses de competência e ignorância comparativa abordam o papel dos julgamentos subjetivos, como sentimentos de confiança, na tomada de decisões. Lusardi e Mitchell (2007) exploraram a validade dos sentimentos subjetivos de competência financeira perguntando aos entrevistados do painel RAND American Life avaliar seus próprios conhecimentos financeiros. Para comparação, os entrevistados também responderam a perguntas destinadas a avaliar objetivamente a sua alfabetização e preparação financeira. Os autores descobriram que a alfabetização financeira auto-avaliada estava positivamente relacionada à alfabetização financeira objetiva. 7 Assim, a alfabetização financeira, seja objetiva ou objetivamente, parece ser um fator chave no planejamento financeiro. O vínculo entre confiança e aversão à ambiguidade tem implicações importantes para os tipos de comunicações que as instituições financeiras usam para alcançar seus clientes. Heath e Tversky (1991) argumentam que os sentimentos de competência dentro de um domínio são determinados pela relação entre o que se sabe e o que se poderia conhecer, e que os sentimentos de incompetência são exacerbados quando as informações relevantes que não possuem ou entendem são salientadas . Uma maneira de chamar a atenção para uma falta de conhecimento dos indivíduos é fazer perguntas sobre as quais não se conhece as respostas. Por exemplo, os usuários de calculadoras de aposentadoria on-line podem ser convidados a inserir estimativas de inflação e pressupostos de crescimento salarial. 8 No entanto, muitas pessoas não possuem esse tipo de conhecimento (Lusardi e Mitchell 2005, 2007). Portanto, um indivíduo que tenta planejar a aposentadoria pode se afastar do episódio, ficando mais confuso do que antes. Na verdade, Agnew e Szykman (2005) descobriram que a aptidão financeira interagiu com certos aspectos do projeto do plano de aposentadoria, por exemplo, os indivíduos de menor conhecimento eram mais propensos a permanecer com a opção padrão do que os indivíduos com maior conhecimento. A percepção de que há uma grande quantidade de informações que não se entende, ou de quem não é consciente, podem paralisar o processo de tomada de decisão. Isso coloca um problema potencial para os formuladores de políticas: garantir que todas as informações relevantes estejam disponíveis para aqueles que desejam e podem usá-lo, sem se afastar ou confundir aqueles menos conhecedores financeiramente, pode ser um equilíbrio difícil de atacar. Evidência anedótica. Como alternativa para evitar a decisão de poupança, indivíduos mal informados podem recorrer a outros que consideram mais experientes. O código tributário extremamente longo e complexo, por exemplo, faz com que as pessoas se reúnam para preparadores de impostos profissionais em abril. Há poucas dúvidas de que a tentativa de arquivar os próprios impostos torna saliente a riqueza de informações que se poderia conhecer, mas não sabe, o que pode levar os indivíduos a querer evitar a situação completamente. Sentimentos semelhantes de incompetência provavelmente surgem quando as pessoas tentam escolher as contas de aposentadoria e as alocações de ativos, mas os impostos devem ser arquivados anualmente, as pessoas podem adiar continuamente a tomada de decisões de poupança. No entanto, quando se decide economizar para a aposentadoria, a apreensão resultante da falta de conhecimento pode surgir. As medidas implementadas por alguns empregadores, como a inscrição automática em contas individuais de aposentadoria (IRAs), permitem que os indivíduos iniciem investimentos sem ter que enfrentar sua falta de conhecimento (por exemplo, Thaler e Benartzi, 2004). No entanto, se os investidores estão motivados a investir seus fundos de forma mais ótima do que a alocação padrão, os sentimentos de incompetência podem surgir ao tentar aprender sobre as finanças. Para remediar essa sensação de inadequação, os investidores muitas vezes se voltam para assessores profissionais para obter ajuda. No entanto, o conselho profissional geralmente vem com um custo, deixando muitos indivíduos de baixa renda para contar com outras fontes para suas informações. Usando o Inquérito às Finanças do Consumidor de 2004, Olsen e Whitman (2007) descobriram que os indivíduos que economizam e cuja renda familiar excede os 70.000 são os mais propensos a usar conselhos financeiros formais, como os advogados, banqueiros ou planejadores financeiros, enquanto aqueles que fazem Menos de 20.000 dependem mais do conselho informal, como o de um amigo ou parente. Além disso, van Rooij, Lusardi e Alessie (2007) demonstraram que indivíduos com baixos níveis de alfabetização financeira são mais propensos do que os alfabetizados financeiramente a confiar em conselhos de amigos e familiares ao tomar decisões financeiras. Finalmente, Olsen e Whitman (2007) observaram que entre 45 e 50% de todos os poupadores reportados na Pesquisa de Finanças do Consumidor indicaram usar fontes públicas, incluindo televisão, rádio e internet, para obter conselhos de investimento. Com a prevalência de disponibilidade e uso de evidências anedóticas relacionadas ao investimento, é importante abordar os efeitos potenciais de tal informação na decisão de poupança. Particularmente no clima econômico atual, os indivíduos são muitas vezes bombardeados com informações financeiras abundantes, mas potencialmente superficiais. A informação divulgada na televisão por exemplo, em quot The Suze Orman Showquotmdashis não necessariamente destinado a ser um conselho de recomendação de tamanho único destinado a pessoas que se aproximam da idade de aposentadoria pode ser significativamente diferente das recomendações para os jovens trabalhadores em seu primeiro emprego. No entanto, o Ormans quotCan I Afford Itquot show segment, em que o host fornece conselhos financeiros personalizados aos chamadores que esperam receber o quotgo antecipado para comprar itens específicos, é extremamente popular. A partir de maio de 2009, a audiência de Ormans aumentou mais de 22% desde o mesmo período do ano anterior (Dominus 2009), uma indicação de que mais pessoas estão interessadas em conselhos financeiros e estão procurando fontes públicas para encontrá-lo. O sucesso do show de Ormans e, em particular, a popularidade do segmento quotCan I Afford Itquot, é um testemunho de pesquisas que mostram que as pessoas são muito mais receptivas a anedotas e testemunhos pessoais do que a estatísticas (por exemplo, Fagerlin, Wang, E Ubel 2005). Grande parte da pesquisa revelando uma dependência de informações anedóticas centrou-se em decisões médicas (por exemplo, Ubel, Jepson e Baron, 2001), mas essa dependência provavelmente atravessa todos os domínios. Os pesquisadores de decisões médicas geralmente acham que as preferências de tratamento dos pacientes são influenciadas por histórias de pessoas que sofreram tratamentos similares. Além disso, os exemplos diários de povos tendem a colocar mais peso em evidências anedóticas do que em evidências estatísticas não são difíceis de encontrar. Por exemplo, um motorista cujo amigo morreu em um acidente de carro porque seu cinto de segurança preso funcionou mal é menos propenso a usar um cinto de segurança do que um motorista que não conhece essa pessoa, embora o cinto de segurança economize milhares de vidas a cada ano. Um dos motivos comumente citados para o poder da evidência anedótica é que as pessoas podem se identificar mais facilmente com uma pessoa real específica do que com uma pessoa da quota-fonte abstrata (Jenni e Loewenstein, 1997), de quem as pessoas se acreditam ser diferentes de muitas maneiras (por exemplo Alicke e outros, 1995). Além disso, os indivíduos podem encontrar evidências anedóticas para serem mais convincentes do que as estatísticas relevantes, porque as pessoas muitas vezes não entendem como interpretar com precisão informações estatísticas (por exemplo, Lipkus, Samsa e Rimer, 2001). Finalmente, as anedotas invocam emoções fortes, que podem alterar a percepção dos indivíduos sobre o risco (Loewenstein e outros, 2001). Todas essas explicações para a influência da evidência anedótica se aplicam bem ao domínio financeiro. Por exemplo, ao decidir como alocar fundos em suas próprias carteiras de aposentadoria, as pessoas podem perguntar aos amigos como eles atribuíram o deles. Mesmo que a pessoa média tende a ganhar mais dinheiro investindo em ações do que em títulos a longo prazo, um investidor cujo amigo perdeu muito dinheiro em ações pode decidir investir em opções menos arriscadas, para não seguir os amigos Passos infelizes. As pessoas que não entendem a diferença de risco que acompanha o investimento em um grupo de ações em relação a outro provavelmente encontrarão conselhos e histórias de amigos e famílias mais convincentes do que as estatísticas relevantes. O mais aplicável no atual clima financeiro são histórias e anedotas de investidores deprimidos que perderam partes significativas de seus fundos de aposentadoria. Tais histórias podem evocar emoções fortes em indivíduos tentando determinar o que fazer com seu próprio dinheiro. Os sentimentos fortes e negativos provocados por evidências anedóticas podem levar os potenciais investidores a inferir um maior risco de investimento do que o garantido (por exemplo, Lerner e Keltner 2000 Loewenstein e outros 2001 Raghunathan e Pham, 1999). O conselho informal de amigos, familiares e meios de comunicação públicos pode moldar as decisões financeiras dos investidores, levando-os a fazer escolhas potencialmente subóptimas. Heurística e Biases Influência Comportamento de poupança As preocupações informativas coletivamente compreendem apenas uma parte do quebra-cabeça de aposentadoria, certamente não podem explicar todas as decisões sub-óptimas que os investidores fazem em busca de segurança de aposentadoria. Lembre-se do relatório do EBRI discutido anteriormente, mostrando que cerca de um quarto dos 56 aos 65 anos de idade pesquisados tinham mais de 90 por cento de seus investimentos em ações, ao contrário do quotshift na equidade. Se esses indivíduos tivessem sido melhor educados sobre a importância de reduzir o risco de ativos à medida que se aproximavam da aposentadoria, estariam melhores que a pesquisa JDM na tradição heurística e tendenciosa sugere que, por uma variedade de razões, as pessoas tendem a distorcer Informações de forma significativa e sistemática. Além disso, os indivíduos geralmente dependem de heurísticas. Ou regras básicas, ao tomar decisões 9 e, embora as heurísticas conduzam indivíduos pelo caminho certo a maior parte do tempo (Gigerenzer 2008), seu uso também produz erros de julgamento sistemáticos e previsíveis (Tversky e Kahneman, 1974). Como resultado, o uso de heurísticas e os desvios resultantes podem levar a erros de decisão mesmo na presença de informações precisas e completas. 10 Regras e processamento do Sistema 1. Mesmo que os indivíduos não busquem expressamente o conselho financeiro, provavelmente irão adquirir informações econômicas incidentalmente. Qualquer programa de notícias, programa de rádio, jornal ou revista é quase certo para mencionar tópicos relacionados às finanças pessoais, e muitas conversas de jantar com amigos ou familiares devem incluir alguma referência à economia. A pesquisa JDM demonstrou que a facilidade ou dificuldade com que a informação pode ser trazida à mente, bem como a freqüência com que uma informação foi encontrada, afeta os julgamentos das pessoas. É bem possível, então, que mesmo contato incidental com informações financeiras possa influenciar as decisões financeiras das pessoas. A disponibilidade heurística (Tversky e Kahneman 1973, 1974) é a tendência para que as pessoas usem a facilidade com que as instâncias de um evento ou situação particular venham à mente como uma indicação da probabilidade de ocorrência do evento. Como tal, a quantidade de cobertura de notícias que um determinado evento recebe pode ajudar a moldar os julgamentos dos povos quanto à probabilidade de o mesmo evento ou resultado acontecer com eles. Por exemplo, pesquisas iniciais mostraram que as pessoas tendem a estimar erroneamente que a incidência de homicídios seja maior do que a do suicídio (Lichtenstein e outros, 1978), e tais julgamentos de probabilidade incorretos foram vinculados diretamente ao número de palavras dedicadas aos eventos relevantes nos jornais. Esta descoberta sugere que os investidores que ouvem muitos relatórios de notícias (ou um particularmente vívido) sobre os futuros aposentados que perdem grandes porções de suas economias de aposentadoria podem pensar que estão destinados a enfrentar o mesmo destino. Como resultado, investidores nervosos podem tirar o dinheiro dos fundos de aposentadoria ou transferir seus fundos para perspectivas menos arriscadas. Os programas de notícias raramente relatam as pessoas com poucas poupanças, e esses relatórios tendenciosos podem levar os espectadores a acreditar que a probabilidade de um resultado negativo é muito maior do que realmente é (Combs e Slovic, 1979). Da mesma forma, a vivacidade de um segmento de notícias inteira dedicado a quotone mans busca por sobrevivência na aposentadoria, por exemplo, pode ajudar a diminuir a estimativa dos telespectadores sobre a probabilidade de que o mesmo resultado aconteça se eles não movem todos os seus investimentos para o não - Contas de poupança de risco. 11 The validity effect mdashthe finding that repeated statements are judged to be more valid (for example, Hasher, Goldstein, and Toppino 1977)mdashmay also be relevant to the impact of news reports and family discussions on an individuals financial behavior. Newscasts tend to report on hot topics such as quotwhat to do with your 401(k),quot and they tend to give the same solutions to the issues each time. This means that a viewer is likely to hear the same advice repeatedly. The validity effect describes how an individual might take as truth opinions expressed in a newscast that may or may not be true. Simply by repeating the same messages, news reports can influence the financial decisions an investor makes. It may seem hard to believe that competent decision makers could be so easily influenced by the vividness of a story or the number of times they heard a news item, but psychological research suggests that people are prone to such heuristic quotthinkingquot (Tversky and Kahneman 1974). People tend to reason intuitivelymdashquotgoing with their gutquotmdashwhich results from System 1 processing (Stanovich and West 2000). System 1 processing is automatic, intuitive, quick, and emotional, while System 2 processing is more effortful, slow, and controlled. People typically rely on System 1 when they do not have the time or cognitive capacity to carefully process all of the available information. Because the time required for careful processing is typically scarce in a fast-paced and complex world, many researchers argue that people operate in System 1 most of the time (for example, Gilbert 2002), although System 2 can override System 1 in certain circumstances (Kahneman 2003). 12 System 1 and System 2 processing are further discussed later, but for now it is important to note that the tendency to process information quickly and intuitively can lead decision makers to be influenced by extraneous and emotion-laden factors. Status quo bias. Recall the asset reallocation problem in which some investors do not follow the shift-in-equity rule of thumb. Research in behavioral economics and behavioral decision making suggests that, even with full knowledge of recommended allocation strategies, investors will likely fail to reallocate their funds throughout their lives. Traditional economic theory cannot account for such suboptimal behavior, but a classic finding from the JDM literature does: Individuals exhibit the status quo bias . Simply put, when the opportunity exists either to do something or to do nothing, people tend to do nothing (Samuelson and Zeckhauser 1988). The average investor probably does not solve the asset allocation problem as an economist would, and may remain invested in too many equities too close to retirement. JDM and behavioral-economics research enables policymakers to anticipate this situation and formulate plans to combat it. For example, many retirement plans now offer life-cycle funds, mutual funds in which the time horizon of ones savings goal determines the asset allocation these funds allow allocations to shift over time, with little to no effort on the part of the investor (Schooley and Worden 1999). In essence, life-cycle funds allow investors to make more optimal allocations by simply doing nothing. 13 In an early demonstration of the status quo bias, Samuelson and Zeckhauser (1988) found that, over their lifetimes, more than half of TIAA - CREF plan participants in 1987 had never changed their initial chosen asset allocation of 50 percent stocks and 50 percent bonds. Although these individuals likely had more stocks in their portfolio at retirement than is recommended, asset allocation is not the only example of the impact of the status quo bias on financial well-being. Automatic-enrollment plans, such as Thaler and Benartzis quotSave More Tomorrowquot (SMarT) plan, exploit individuals tendency to stick with the status quo. With automatic enrollment, employees enter into a savings plan by default and must take action to withdraw from the plan few individuals exercise their right to opt out. In addition to automatic enrollment, the SMarT program also includes automatic increases in contribution rates following pay increases, as the status quo bias suggests that investors will fail to actively increase their contributions over time. These aspects of the SMarT program, along with some other key components, led to substantial increases in the savings rates of employees in three major companies (Thaler and Benartzi 2004). In another real-world example of the influence of automatic enrollment on subsequent participation in a 401(k) plan, Madrian and Shea (2001) found that 86 percent of employees in a large U. S. corporation participated in the companys 401(k) plan when enrollment was automatic, as compared to the 49 percent of employees who participated when they had to enroll actively. In addition to observing the effects of the status quo bias on 401(k) participation, Madrian and Shea (2001) found differences in 401(k) contributions between those who were automatically enrolled and those who had to expressly elect enrollment. Specifically, those who participated in the 401(k) plan as a result of automatic enrollment contributed about 3 percent to the plan, while those who elected to participate before automatic enrollment was introduced contributed over 7 percent of their pay to the plan. Why should there be a difference in contribution rates between those who were automatically enrolled and those who had to actively enroll in the 401(k) plan Not surprisingly, 3 percent was the default contribution rate under the automatic enrollment plan. The results from the naturalistic experiment reported by Madrian and Shea therefore highlight a different, but related, finding from research in behavioral decision making: defaults matter. Default effects. Defaults have proven to have profound effects on individuals behavior in a variety of contexts. For example, Johnson and Goldstein (2003) demonstrated the effects of defaults on participants willingness to be organ donors and reported on the donation rates of countries adopting opt-in versus opt-out organ-donation policies. In all cases, countries whose residents have to opt in to organ donation show dramatically lower donation rates than those that assume residents want to donate while reserving the right to opt out. Researchers have observed similar default effects in the domain of automobile insurance. Johnson and others (1993) found that New Jersey and Pennsylvania motorists tended to stay with their respective states insurance policy defaults regarding the right to sue. The authors observed that, as a result, 80 percent of New Jerseyans did not have the right to sue, while 75 percent of Pennsylvanians did. Returning to the domain of retirement investment decisions, Choi and others (2004) reported that among three different companies, between 65 percent and 87 percent of employees participating in a 401(k) plan because of automatic enrollment tended to stick with the default contribution rate of 3 percent or less. The authors did find, however, that the effect of the default decreased over time. Nevertheless, by contributing the lower default rates to employer-sponsored 401(k) plans, employees often sacrifice substantial matching funds over time (Thaler and Benartzi 2004). From an economic perspective, differences in defaults should have no bearing on individuals decisions regarding whether to participate or how much to contribute to retirement saving plans economically rational human beings should choose the option that maximizes their utility, regardless of the status quo and the default option. However, the research shows that default options and the status quo affect individuals decisions in a variety of contexts. 14 Policymakers who anticipate these effects have the unique opportunity to construct decision environments and design options that produce welfare-improving outcomes for individuals who choose simply to do nothing. The implications of the status quo bias and default effects for retirement savings behavior are apparent, and policymakers have already begun to quotharness the power of inertiaquot (Brookings Institution 2010) to encourage Americans to save. Although selecting savings-promoting defaults and automatically enrolling employees into retirement savings accounts are reliable ways to increase savings behavior, approximately 78 million employees (about half of the U. S. workforce) have no access to employer-sponsored retirement plans (Iwry and John 2009). For roughly half of the nations employees, then, default effects and automatic enrollment are moot points. The Brookings Institutions Retirement Security Project (RSP ) is attempting to change that by facilitating retirement savings for U. S. workers whose employers do not offer 401(k) plans (Iwry and John 2009). The RSP proposes creating mandatory automatic IRA s employers with more than 10 employees would automatically deduct payroll funds and place them in the employees account. Although enrollment in the IRA would be automatic, employees would have the opportunity to opt out of the plan at any time. Additionally, these IRA s would specify a default investment fund however, the details of this aspect of the plan remain to be determined. Intertemporal Choice and Saving The automatic IRA s proposed by the RSP plainly make use of the behavioral decision-making research findings on status quo bias and default effects, but they also draw attention to another aspect of decision-making research, namely self-control and procrastination . Self-control and procrastination. Only 8ndash10 percent of workers eligible for IRA s participate in such self-initiated plans, while nearly 70 percent of workers whose employers sponsor retirement plans, such as 401(k) s, choose to participate (Iwry and John 2009 Springstead and Wilson 2000). The need to save for retirement is universal, so why should those with employer-sponsored savings plans save at such significantly higher rates than those who must save on their own The transaction cost of making a deposit into an IRA likely is one reason for the discrepancy in enrollment rates, but it is not the whole story. Going to the bank is not so onerous that it would preclude millions of otherwise financially savvy individuals from saving for retirement. Likewise, although employers often offer an attractive partial match of employee contributions to the plans they sponsor, this difference between IRA s and 401(k) s cannot entirely account for the difference in participation rates if it did, the participation rate in employer-sponsored plans with an employer match would be closer to 100 percent (Thaler and Sunstein 2008). 15 Instead, opening ones own IRA may be akin to starting a weight-loss program. Not eating a tempting snack now in the pursuit of future weight loss is similar to reducing ones current income (thereby forfeiting some tempting purchases) in the pursuit of a comfortable retirement. The chronic dieters promise to quotstart my diet on Mondayquot may be repeated countless times before the dieter finally decides to get serious and put down the cookie. Similarly, the chronic spender may tell herself she will enroll in a retirement savings plan when she receives her next paycheck, but repeatedly fails to submit the form or take the trip to the bank. 16 Thaler and Shefrin (1981) describe this internal struggle as a conflict between a quotfarsighted planner quot and a quotmyopic doer. quot The planners main concern is utility over the lifetime, while the doer is only concerned with the present. In order to save adequately for retirement or successfully lose weight, the planner must manage the doer by creating incentives to act less myopically or by setting up rules that preclude short-sighted behavior. This underscores one critical benefit of automatic payroll deductions: Before an employee ever receives his or her paycheck, the money designated for retirement has already been deducted and deposited into the retirement account. Self-control has been removed from the equation. Additionally, automatic enrollment in a retirement account removes procrastination from the equation. 17 The automatic IRA that the RSP proposes would likewise allow individuals whose employers do not offer retirement plans a way to circumvent the self-control and procrastination problems. Even without employer-matched contributions, employees enrolled in automatic IRA s can reap the benefits associated with retirement savings via payroll deduction. 18 Hyperbolic discounting. One reason why self-control and procrastination issues impede saving for retirement is hyperbolic discounting . Again, people typically intend to forfeit small, immediate gains for larger rewards in the future, but they often fail to make the optimal choice at decision time (Kirby and Herrnstein 1995). For example, in the middle of the week, a dieter can say with confidence that she will start her diet on Monday. This is because the warm chocolate chip cookie that will tempt her on Monday (a smaller, sooner reward) and the weight loss that would result from not eating the cookie (a larger, later reward) are both in the future. However, on Monday, when the choice to eat the cookie is in the present and only a slimmer physique is in the future, the dieter is likely to eat the cookie. Such a preference reversal occurs because, contrary to the economic axiom of stationarity (Fishburn and Rubenstein 1982), individuals do not discount the future at a constant rate. Instead, people tend to discount the future in a hyperbolic fashion, such that the relative preferences for a larger, later reward and a smaller, sooner reward change with the passage of time. As the decision point for the two options draws nearer to the present, the decision maker values the small, immediate reward more than the larger future reward. Kirby and Herrnstein demonstrated this effect by varying participants opportunities to receive pairs of real monetary awards or goods at various times in the future. As both options moved farther into the future, the experiments subjects reversed their previous preference, and chose the larger, later reward over the smaller, earlier reward, illustrating hyperbolic discounting of time. 19 Interestingly, individuals tend to recognize that they may forsake their long-term goals for instant gratification as Laibson (1997) notes, people value self-control, though many feel they do not have enough of it. In recognizing this flaw in their own judgment, some individuals employ precommitment strategies to help them to accomplish their long-term goals. For example, one might set ones alarm clock an hour early with the intention of going for a morning jog. When staying in bed for an extra hour and a morning run are both in the future, the exercise is more highly valued. However, many individuals know that when the alarm sounds, staying in bed will be much more attractive than the promise of good health later. Some individuals, aware of and acting to overcome their dynamically inconsistent time preferences, will place the alarm clock across the room so that the tired, myopic self will have to get out of bed. Other examples of precommitment strategies include Christmas clubs 20 and annual gym memberships. Saving for retirement involves a trade-off between more money in ones paycheck now and a more comfortable life in the future, much as weight loss involves a trade-off between sleeping in now and better health later. The nature of retirement savings, then, almost requires individuals to use precommitment devices. Payroll deduction is one such device. In fact, retirement accounts themselves serve as precommitment devices, inasmuch as they discourage impulsive behavior through penalties on early withdrawal. Laibson (1997, 445) describes such accounts as having quotgolden eggquot properties that is, they provide large long-term advantages at the expense of immediate benefits. Emotions. Evidence of the effects of emotions on decision making is far too abundant to discuss in its entirety here. Emotions can affect which variables enter into ones decisions, the decision outcomes themselves, and postdecision variables, such as satisfaction with and adherence to the decision (for example, Baron 1992 Rick and Loewenstein 2008). Although a discussion of the role of emotions in financial decision making and savings behavior could apply to several sections in this article, I will narrow the discussion to emotions as they relate to intertemporal choice, and more specifically, self-control and hyperbolic discounting. 21 Loewenstein, for example, argues that quotvisceral factorsquot such as drive states, cravings, moods, and physical pain can impact self-control. Loewenstein contends that visceral factors can produce effects similar to those engendered by hyperbolic discounting, albeit in a different way. As described above, hyperbolic discounting leads individuals to choose options that provide immediate gains over options that provide long-term benefits. Similarly, visceral factors can lead individuals to choose the option that offers instant gratification, but only when the item in question is physically proximal to the decision maker (Loewenstein, 1996). Citing Mischels (1974) work on impulsivity in children, Loewenstein notes that when the children were made to choose between an immediate, smaller reward and a delayed, larger reward, the children found it more difficult to wait for the larger reward when either the immediate or the delayed reward was in the room with them. Loewenstein contends that the physical presence of either the smaller, immediate reward or the later, larger reward triggered the childrens visceral response and the immediate desire for that reward, even if it was smaller. Interestingly, simply showing a picture of the delayed reward did not trigger an impulsive choice, leading Loewenstein to conclude that the picture did not stimulate a visceral response. More recently, neuroimaging studies have also demonstrated the role of emotions in hyperbolic discounting. McClure and others (2004) found increased activity in areas of the brain related to emotion when participants confronted the opportunity to receive an immediate reward, but not when they faced intertemporal choices that lacked an immediate option. Furthermore, when participants did choose larger, later rewards over smaller, immediate ones, regions of the brain associated with higher cognitive functions were more active than those associated with emotional responses. Through the innovative use of functional magnetic resonance imaging (fMRI ), the authors were able to demonstrate that behavior consistent with a hyperbolic treatment of time may be driven by emotional responses to immediate rewards. As discussed throughout this article, saving for retirement entails making financial decisions that deliver benefits in the future at the expense of immediate gratification. Gauging whether it is worth sacrificing pleasure in the present for future benefits requires decision makers to make predictions about their future happiness to ask, for example, how will I feel if I have no money to do the things I want to do in retirement Intertemporal choice, then, necessitates the evaluation of current emotions as well as emotions that will only be experienced in the future, when the consequences of ones earlier choices and decisions are realized. Researchers in JDM and behavioral economics have noted the difference between these quotexpectedquot and quotimmediatequot emotions (Loewenstein and Lerner 2003 Loewenstein and others 2001) and have described both their unique and combined effects on the decision process (Rick and Loewenstein 2008). Immediate emotions, such as those brought about by visceral factors, may lead individuals to make decisions that are not in their future best interest for example, the smell of freshly baked cookies may lead a dieter to forsake her long-term weight-loss goal. At the same time, expected emotions, which can arise when thinking about future outcomes, may help a dieter resist temptation thinking about how badly she will feel after eating the cookie or how excited she will feel if she loses five pounds may help the dieter abstain. 22 One particularly important finding from the JDM literature relevant to expected emotions is that people often do not make accurate affective forecasts . 23 that is, they do not correctly predict their future emotions. Specifically, individuals tend to imagine that the emotions resulting from a particular event will be more positive or negative than they actually turn out to be (Wilson and Gilbert 2003). Additionally, people believe that their predicted emotions, whether positive or negative, will last longer than they do in reality (Gilbert and others 1998). A related finding, termed projection bias (Loewenstein, ODonoghue, and Rabin 2003), demonstrates that although individuals recognize that their quottastesquot will change over time, they fail to appreciate the magnitudes of such changes (Conlin, ODonoghue, and Vogelsang 2007). 24 As such, projection bias may lead individuals to make choices that are more extreme than they would otherwise prefer for example, an individual choosing a vacation destination in the middle of a snowstorm may elect to visit an extremely warm location, only to find himself sweltering while actually on the trip (Loewenstein, ODonoghue, and Rabin 2003). The popular saying quothis eyes are bigger than his stomachquot likely describes behavior borne from the projection bias. For intertemporal choices (choices over time), mispredictions of future emotions and tastes can lead to decisions that are disadvantageous to ones future self. Decision Context Affects Savings Behavior The way a particular decision is presented or the way individuals think about a particular decision can affect the ultimate choice (for example, Tversky and Kahneman 1981 Thaler and Sunstein 2008). Changing the way information is communicated or framed can lead to differing responses (Tversky and Kahneman 1981), and decision makers themselves can interpret information in various ways, also leading to differing choices (for example, Stanovich and West 2000). As described below, there are a number of findings in the JDM and behavioral-economics literatures demonstrating how various aspects of the decision context can significantly influence the savings decision. Reference dependence, loss aversion, and perceptions of risk. As described above, the automatic transfer of funds from ones paycheck into a retirement account can aid in enforcing self-control. Automatic transfer also allows individuals to bypass the effects of loss aversion . Individuals do not evaluate their wealth in an absolute sense, but rather in reference to the status quo (Kahneman and Tversky 1979). The status quo establishes a reference point from which changes are evaluated as gains or losses ( reference dependence ). Loss aversion refers to the empirical finding that losses hurt roughly twice as much as equivalent gains feel good (Tversky and Kahneman 1991). The application of reference dependence and loss aversion to retirement saving via payroll deduction is summarized by a simple principle: If you dont have it, you cant lose it. An employees reference point for income likely is net earnings, or take-home pay. If the employee does not have retirement savings automatically deducted, then any retirement account contributions must be actively removed from take-home earnings, resulting in a perceived loss from the status quo. However, if this employee earmarks a fraction of his or her earnings for automatic transfer into a retirement account, he or she likely will not get a sense of quotlosingquot spending money retirement savings will already be subtracted from gross earnings, just like federal and state taxes and health insurance premiums. With retirement contributions automatically deducted, the slightly lower net pay becomes the new status quo or the reference point. Loss aversion, therefore, may not be problematic for employees who have access to automatic payroll deductions, but it poses a problem for employees who must save on their own. For individuals considering saving equal dollar amounts, the experience of an employee with no access to automatic deductions is quite different from that of an employee with such access. For the former, saving seems painful, while for the latter, saving is relatively easy, even though the final result is the same. Such is the significance of the reference point. Reference points determine whether an individual perceives a particular outcome as a gain or a loss, and encoding an outcome as a gain or a loss can have profound behavioral effects. The reference points role in partitioning the range of possible outcomes into gains or losses also influences an individuals risk preference, which can, in turn, affect behavior. Studies in both traditional and behavioral economics have demonstrated risk aversion . which is the preference for a sure thing over a gamble with a higher expected value (Kahneman and Tversky 1984). Economists explain risk aversion in terms of expected utility maximization using a concave utility-of-wealth function (Rabin and Thaler 2001). Behavioral economists, however, view risk aversion as more complexmdashfor example, recognizing that people have different risk preferences for gains and losses. Essentially, the reference point transforms the utility function from a simple concave function defined on total wealth to an S-shaped function defined on gains and losses this S-shaped function (the prospect theory value function ) is concave for gains and convex for losses (Kahneman and Tversky 1979, 1984). Consistent with the traditional economic explanation of risk aversion, JDM and behavioral-economics research has found that individuals are risk-averse in the region of gains, where the function is concave. However, in the loss region, where the S-shaped function is convex, individuals tend to display risk-seeking behavior (Kahneman and Tversky 1984). Taken together, reference points and differences in risk preference for gains and losses are important for retirement savings because they can influence individuals investment decisions. For example, the disposition effect . which is the tendency for investors to sell winning stocks too soon and hold onto losing stocks too long (Odean 1998 Shefrin and Statman 1985), can be explained by individuals asymmetric risk aversion on either side of the reference point. In the case of stocks, it is reasonable to assume that an investors reference point is the purchase price of the stock (Odean 1998) if the value falls below the purchase price, the investor will perceive it as a loss, and if the stock rises above the purchase price, the investor will code it as a gain. As such, investors will tend to exhibit risk-averse behavior if the stock has increased in value and risk-seeking behavior if the value has gone down. Behaviorally, this difference in risk perception leads investors to want to sell winning stocks too soon, thereby realizing the sure gain and avoiding a future loss, and to want to hold onto losing stocks too long, persisting with the risky prospect. JDM and behavioral-economics researchers have documented many examples of the impact of reference points on risk preferences and behavior, including the quothouse money effectquot (greater risk-seeking after a realized gain) and quotbreak-even effectsquot (opportunities allowing individuals to break even are more appealing following a realized loss) in gambling (Thaler and Johnson 1990). More recently, researchers have explored the effects of reference point adaptation (for example, Arkes and others 2008), which is a shift in the reference point in the direction of a previous gain or loss, as well as the effects that expectations can have on such reference point shifts (Koumlszegi and Rabin 2006 Yogo 2008). With the disposition effect as an example, it is clear how adapting the reference point to realized gains or losses can change the way investors evaluate their holdings. For instance, if a stock share originally purchased for 20 increases in value to 30, the investor may consider the new stock price of 30 to be the reference point. As such, the 30 stock price no longer represents a gain and is unlikely to induce the investor to choose the risk-averse option to sell the stock. Similarly, if the stock price falls in value to 10, and this lower value is deemed to be the new reference point, the investor will not consider the 10 stock to be a loss . and will not display the risk-seeking behavior of holding onto it (Arkes and others 2008). The significance of the reference points ability to transform individuals perceptions and affect their judgments and decisions cannot be overstated. Choice bracketing. Individuals who live quotpaycheck to paycheckquot or otherwise feel that they have no disposable income may be unlikely to save for retirement. For them, reluctance to save may stem from narrow choice bracketing . Choice bracketing refers to the way in which people combine individual choices when selecting a course of action. Considering only one or two choices in a choice set is narrow bracketing, and considering many choices is broad bracketing (Read, Loewenstein, and Rabin 1999). For example, if a consumer considers the cost of a single specialty coffee (quotMy coffee costs 3.95quot) she is bracketing narrowly . but if she considers the coffees impact on her yearly spending (quotMy coffee costs me 1,441.75 a yearquot), she is bracketing broadly . Choice bracketing can have major implications for the types of decisions people make, as illustrated by the quotpennies-a-dayquot (PAD ) phenomenon (Gourville 1998). Marketers use the PAD strategy when they urge consumers to bracket a payment narrowly rather than broadly, enabling one to view a relatively large payment (such as 365) as a seemingly trivial expense (quotjust a dollar a dayquot). Retailers and charities often use PAD tactics to induce consumers or donors to spend their money, and previous research exploring the PAD strategy has demonstrated the effectiveness of such manipulations in apartment rent valuation (Price 1994), telephone plan pricing, and magazine subscription costs (Gourville 1998). The principles that make PAD a successful marketing strategy can also help individuals achieve their personal savings goals: just quotpennies a dayquot can add up to significant savings over time. 25 With this in mind, the Social Security Administration has begun to insert an information sheet into the mailings that contain the annual Social Security statements for young workers. The insert illustrates the benefits of the PAD strategy with a bar graph that shows the growth in savings associated with putting away 25 and 50 per week for 40 years, assuming a 5 percent annual rate of return (SSA 2009). This graph helps young workers consider the aggregate effects of even relatively small weekly savings. Another example of the effects that bracketing can have on individuals financial decision making is myopic loss aversion (Benartzi and Thaler 1995). Myopic loss aversion refers to investors tendency to be more risk averse when they evaluate their stock portfolios more frequently. This effect is the result of the particularly disadvantageous combination of narrow bracketing and loss aversion. Over the long run, taking risks in the stock market generally produces greater gains than less risky approaches, such as purchasing bonds (Benartzi and Thaler 1995 Mehra and Prescott 1985). When investors evaluate their portfolios too often (or, myopically), they observe the stock market fluctuations that are to be expected in the short run, but do not generally affect long-term returns. Research has suggested that investors will be more sensitive to small negative fluctuations than to small positive ones (that is, loss aversion), resulting in more risk aversion and potentially suboptimal investment decisions (Benartzi and Thaler 1995). Framing effects. System 1 processing often leads to judgment errors, such as those brought about by the availability heuristic. System 1 impulses that System 2 fails to override can also produce self-control failures (Shiv and Fedorikhin 1999). Additionally, System 1 processing leaves decision makers susceptible to framing effects (Tversky and Kahneman 1981), whereby manipulating surface features of a decision problem can lead individuals to make different judgments about otherwise equivalent options. Framing effects highlight how quotlightlyquot System 2 actually monitors System 1s outputs (Kahneman 2003), and they also underscore the fundamental role policymakers can have in affecting change in individuals. The default effect mentioned earlier is an example of a framing effect simply designating a particular option as the default leads to its acceptance by a disproportionate share of decision makers. Whether a decisionmdashorgan donation, for examplemdashis framed as an opt-in or an opt-out choice, analytical System 2 recognizes the options are the same (you can donate your organs or not) intuitive System 1 does not get beyond encountering the default option and sticking with it. Framing effects challenge the notion that man is economically rational, in that they violate the principle of invariance, 26 a basic axiom of rationality (von Neumann and Morgenstern 1944). The principle of invariance asserts that quotdifferent representations of the same choice problem should yield the same resultsquot (Tversky and Kahneman 1986, S253). In other words, the way in which options are presented to the decision maker should have no bearing on his or her ultimate decision. Default effects demonstrate violations of invariance because, for example, individuals preferences for organ donation are indeed affected by the presentation of options. One classic example of the impact of framing on choice is the quotAsian diseasequot problem (Tversky and Kahneman 1981), which also highlights the systematic difference in individuals risk preferences for gains and losses described earlier. In the Asian disease problem, participants are asked to choose which of two risky programs should be adopted to treat an imminent outbreak of a deadly Asian disease. The options are either presented in terms of the number of people who will be saved as a result of the adopted treatment or in terms of the number of people who will die if the treatment plan is adopted. Results show that participants choose the riskier treatment option when the outcomes are presented in terms of losses (that is, the number of people who will die) and the less-risky option when the outcomes are presented in terms of gains (that is, the number of people who will be saved). As explained earlier, individuals risk preferences, and subsequent judgments and decisions, tend to differ depending on whether they are considering gains or losses from a reference point. The Asian disease problem is an ideal example of how framing can shift individuals assessments of a scenario, leading them to pursue disparate courses of action. Using a paradigm analogous to the Asian disease problem, Olsen (1997) surveyed Chartered Financial Analysts and found that their responses depended on whether a particular investment decision was framed as either a gain or a loss. Specifically, the survey posed a scenario in which a clients 60,000 investment was in jeopardy due to a downturn in the stock market. The analysts were then asked to choose between two risky strategies in which a certain amount of the clients investment would be saved (gain frame) or lost (loss frame). As in the Asian disease problem, these experienced investment managers chose the less-risky option when the options were presented in a gain frame and the riskier option when they were presented in a loss frame. Even though the clients final outcome would be identical in both scenarios, the analysts choices were influenced by framing. Epley, Mak, and Idson (2006) explored how framing can affect spending decisions. The authors examined the likelihood that subjects would spend funds according to whether those funds were labeled a quotbonusquot or a quotrebate. quot Consistent with the argument that individuals perceive a quotbonusquot as a gain from the status quo and a quotrebatequot as a return to a previous level of wealth, participants were more likely to spend funds described as a bonus and save funds described as a rebate. The authors demonstrated that framing even affected individuals recollection of earlier behavior. Participants who were asked to recall their behavior after receiving a government-issued check under President Bushs Economic Growth and Tax Relief Reconciliation Act of 2001 reported spending more of the money if the check was described as a quotbonusquot than those to whom it was described as a quotrebate. quot Because the tax relief was termed a quotrebatequot at the time, this unintentional framing may have resulted in Americans saving, rather than spending, much of the money that was meant to stimulate the economy. In fact, Shapiro and Slemrod (2003a, 2003b) found that prior to actually receiving their checks, respondents generally thought that their rebate would be unlikely to stimulate their spending behavior Epley, Mak, and Idsons (2006) experiment suggests that framing the checks as rebates may have led Americans not to spend these funds. This study highlights how JDM research can be used to inform policy policymakers must be mindful that framing can affect individuals behavior and provide unintended impediments to well-meaning interventions (Epley and Gneezy 2007). Choice architecture. As shown above, simply changing the wording of the options (quotlives savedquot versus quotlives lostquot or quotbonusesquot versus quotrebatesquot) is just one example of how framing can have real implications for decision making. Policymakers play a crucial role in designing and engineering decision environments as choice architects . they can nudge decision makers in one direction or another by tweaking certain aspects of the choice context. To complicate matters, every aspect of the choice environmentmdashfrom which candidates name appears first on a voting ballot to the location of restrooms in an office buildingmdashhas the potential to affect behavior. Thus, when contemplating the specifications of any choice environment, the choice architect confronts a challenging inevitability: there is no quotneutralquot design (Thaler and Sunstein 2008). One of the candidates names must appear first on a ballot, and a buildings restrooms must be located somewhere, and research on the importance of choice architecture suggests that such decisions are not inconsequential. For example, Miller and Krosnick (1998) demonstrated that candidates for elected office in various counties in Ohio enjoyed an advantage over their opponents if their name was listed first on the ballot. In order to test for name-order effects, the authors created quotorder variables, quot which took into account the order in which candidates names appeared on the ballots in different precincts in three of Ohios counties. The results were striking: Significant name-order effects were seen in just under half of the 118 races. Furthermore, approximately 90 percent of the races in which name-order effects were observed showed a clear primacy effect: When a candidate was listed first on the ballot, he or she received more votes than when he or she was listed last. Ideally, the order in which candidates are listed on a ballot would have no bearing on who is ultimately elected this detail is unrelated to a candidates job qualifications. 27 Miller and Krosnick demonstrated, however, that this seemingly arbitrary aspect of the voting process had a significant, and somewhat troubling, effect on voter behavior. As such, the authors suggest that all states adopt the practice of rotating candidates names on ballots, as is required in Ohio, Idaho, and Montana. Miller and Krosnicks study is a prime example of the effects that presumably insignificant details can have on behavior. As Thaler and Sunstein (2008, 3) note, when it comes to choice architecture, quoteverything matters. quot Indeed, Benartzi and Thaler (2007) discovered that even the number of lines on an investment sign-up form had an effect on investment choices. The researchers asked subscribers to the Morningstar website to indicate on a provided form how they would choose to distribute their retirement funds amongst eight potential options. On the form presented to one group of participants, four lines were visible, and a link was provided to expand the display to eight lines. For the second group of participants, all eight lines were visible. This ostensibly inconsequential difference in the format of the allocation form produced a four-fold difference in the percentage of participants choosing more than four funds: Only 10 percent of those presented with the form containing four visible lines chose more than four funds, while 40 percent of those with eight lines visible chose more than four funds. Similar to the name-order effect in voting described above, the number of lines listed on an investment form should have no bearing on the number of funds in which individuals ultimately invest the best investment strategy is unrelated to the number of lines listed on a sign-up form. Nevertheless, although the effort of expanding the option list from four to eight was negligible (that is, simply clicking on a link), the difference between the forms actually affected individuals proposed investment strategies. It is not difficult to think of examples in which the clever use of choice architecture by retailers can induce consumers to spend more. For example, displaying a product at the end of an aisle, using a yellow price sign, or placing an item in a separate bin will likely signal to a shopper that an item is on sale, even if it is not. Choice architects in the retail industrymdashas well as lobbyists, politicians, and anyone elsemdashhave access to countless tools to design decision environments with their own best interests in mind (Economist 2006). However, policymakers can also use choice architecture to usher in positive changes, such as increasing Americans savings rates. For example, both the SMarT program described in Thaler and Benartzi (2004) and the automatic IRA s proposed by the RSP employ choice architecture to promote retirement savings. Choice architects are in a unique position to nudge individuals down a particular path, and although this task is often met with controversy (Economist 2006 Thaler and Sunstein 2003, 2008), responsible architects can encourage individuals to take positive steps toward accomplishing their goals. Future Directions in the Study of Retirement Savings When considering how and why individuals decide to save for retirement, there are a number of issues that policymakers must untangle. Some of these matters deal with the amount and type of information decision makers receive, and these concerns often can be met with interventions aimed at improving financial literacy or by presenting relevant information that is more user-friendly. Traditional economic theory suggests that if decision makers are armed with all of the appropriate information and tools, they should make optimal decisions. The research outlined in this article, however, suggests that informational issues may represent only a subset of the impediments individuals can face on their paths to future financial well-being. The concepts and examples presented herein demonstrate that people make an array of unsatisfactory choices and decisions, ranging from self-control failures to suboptimal asset allocation, that cannot be readily explained by economic models nor entirely remedied by making additional information available. Behavioral economists and JDM researchers have studied decision makers imperfect judgments and have presented coherent theories to explain many of them. Several novel interventions based on these theories are described below. Incentivize Saving Starting a diet is undoubtedly a difficult undertaking (as evidenced by the rising obesity rate in America), but growing waistlines can help motivate individuals to begin a weight-loss program. Although the results of dieting are delayed, the incentives of weight loss are ever-present. Unfortunately, saving for retirement lacks the same conspicuous benefits as weight loss. A photo of ones future 65-year-old self cannot be taped onto a credit card the way a picture of ones formerly thin self can be taped onto the refrigerator. For many people, the benefits of saving for retirement are so remote and so intangible that a little extra money in ones paycheck now is far more attractive than making oneself comfortable in the very distant future. Nevertheless, the consequences of repeated self-control failures regarding saving can be substantial recall that SSA s quotyoung workerquot insert shows that placing just 25 per week (roughly equivalent to a specialty coffee per day) in a retirement savings account with a 5 percent annual rate of return can result in savings of more than 160,000 over 40 years (SSA 2009). By showing how saving modest amounts now can accumulate substantial amounts over time, the graph in the SSA insert can urge young workers to think about saving in a way that they may not have done on their own. Still, it does not provide an immediate incentive to engage in behavior whose benefits are only realized in the distant future. Potential savers lack the incentive to save that dieters receive each time the number on the scale goes down or their dress size gets smaller. Incentivizing saving in the present may help individuals adequately prepare for the future. One possible strategy could be for employers to offer their employees quotpointsquot for saving, much as they offer points or bonuses for making sales or acquiring new clients. Employers who match their employees retirement contributions could take a portion of that match and instead put it toward tangible goods, such as big-screen televisions or washing machines. 28 Such a strategy would encourage employees to reach large long-term savings goals (retirement funds) by providing smaller goals in the short term (a new TV ). Alternatively, employers could set up a lottery system, wherein employees who actively contribute a certain minimum percentage of their paycheck each month would be entered into a lottery with a cash prize. Banks around the world have used lottery-linked deposit accounts to encourage customers to save, and have succeeded in increasing their number of customers (Guilleacuten and Tschoegl 2002). In an employer-based version of a lottery, only employees contributing to their retirement accounts during a given period would be entered into the lottery. This plan capitalizes on individuals desire to minimize regret (Zeelenberg 1999), as those who have not contributed to their retirement account have no chance of winning even though their coworkers do. To make regret even more salient, every employees name could be entered into the lottery, but only employees contributing to their retirement accounts could actually win. In this arrangement, employees would know if they would have won had they contributed that month. This is similar to the common practice on game shows or slot machines in which the prizes associated with the options the players did not choose are revealed. 29 Reframe the Problem Narrow framing, or bracketing, has been suggested as a tool to facilitate adherence to self-control goals that might otherwise be overwhelming. Read, Loewenstein, and Rabin (1999, 189) introduce the notion of quotmotivated bracketingquot as a way for recovering alcoholics, for example, to reframe their goals in a way that emphasizes daily successes (quotone day at a timequot) rather than month-long, year-long, or life-long undertakings. In a similar vein, the authors also suggest bracketing budgets more narrowly, so as to reduce ones ability to rationalize overspending in the present by planning to use the remainder of a week or month to quotmake up for it. quot A weekly food budget of 70 is easier for a spendthrift to manipulate than a daily food budget of 10. In this sense, narrow bracketing could lead to more advantageous saving behavior. Shifting from a broad frame to a narrow frame may also help investors save by allowing them to recognize that saving large sums of money for retirement may not be as daunting as it seems. This notion may be particularly important for individuals who use online calculators to determine how much money they will need to save to replace a given percentage of preretirement earnings. When future retirees obtain projections of how much money they will need for retirement, the number typically is very largemdashmany individuals are undoubtedly shocked at the hefty sum of money they will need for retirement. One might feel that such a huge amount of money is surely unattainable, leading him or her to assume that any attempts to save would be futile. However, if one were to shift from a broad frame to a narrow one, in which small, incremental savings goals are emphasized, the task of saving for retirement may seem within reach, and therefore, more worthwhile. Indeed, Read, Loewenstein, and Rabin contend that narrow bracketing can make ones goals seem more manageable. Change Reference Points As mentioned earlier, employees who must initiate their own retirement savings are more vulnerable to the effects of loss-aversion than those with automatic payroll deductions because of their differing reference points. Those without automatic payroll deductions may alleviate some of the pain of diverting part of their discretionary income toward retirement saving by actively changing their reference points. For instance, these individuals can mentally subtract the amount that would otherwise be deducted automatically, and this adjusted amount can serve as the employees new reference point. This mental accounting 30 quottrickquot would allow individuals to establish a reference point that already takes into account the amount earmarked for retirement savings. This method is admittedly more susceptible to lapses in self-control than automatic payroll deductions, but it may be at least partially effective in encouraging self-directed retirement saving. Although the mental accounting trick described above exploits reference dependence to encourage saving, reference points can also be impediments to saving. Salaries are, in essence, reference points for yearly income as such, salaries establish a level below which potential savers may be unwilling to fall. The pain associated with seeing a loss from this reference point may preclude retirement savings. This may be especially true for those who feel they have no extra money to save. Once again, however, changes in reference points may encourage saving. Imagine an employee who earns 55,000 and finds it too difficult to save for retirement because of current financial needs. If asked whether the job offer would have been declined if the salary had instead been 52,500, the employee would more than likely answer quotno. quot Between a 55,000 salary and a 52,500 salary, the difference in weekly earnings is only 50, which can accumulate to roughly 325,000 of savings over 40 years, assuming a 5 percent rate of return (SSA 2009). Upon realizing that he or she could have survived with a lower starting salary (that is, reference point), an individual may decide he or she can actually adapt to a smaller paycheck and save for retirement. Individuals would be unlikely to mentally shift their reference points on their own, 31 but by adjusting expectations, policymakers can potentially alter the way decision makers evaluate certain problems. The interventions described above aim to encourage saving across the lifespan so that individuals will be more financially secure in retirement. Incentivizing saving in the short term, reframing the decision context, and shifting reference points are all ways that can help individuals save more and spend less. These approaches are but a few of the possible interventions that researchers and policymakers could offer to aid individuals in their pursuit of future financial well-being. Conclusion The purpose of this literature review is to familiarize readers with aspects of the savings decision not accounted for by traditional economic theory. Researchers in JDM and behavioral economics have explored individuals seemingly irrational savings behavior and have developed coherent theories to explain some of these behaviors. A departure from the notion of man as economically rational can help policymakers to better understand why people make the decisions they do. As a result, policymakers can craft careful interventions aimed at helping individuals make more optimal decisions. Additionally, in the absence of corporate or governmental intervention, decision makers themselves can take steps to remedy their own suboptimal behavior (for example, through precommitment devices). Examples of interventions already in place (such as the SMarT plan) have been identified, and possible avenues for future interventions have been presented. The behavioral economics and JDM concepts summarized herein can serve as powerful tools to encourage savings behavior and lead Americans toward more comfortable retirements. ensp1 For more information regarding the origins and history of JDM research, see Goldstein and Hogarth (1997), Hogarth (1993), and Kahneman (1991). For expositions on the development and recent increase in popularity of behavioral economics see Angner and Loewenstein (2007), Loewenstein and Camerer (2004), and Rabin (2002). ensp2 According to the Bureau of Economic Analysis, personal savings as a percentage of disposable income was 4.8 percent in December 2009 (bea. govnewsreleasesnationalpi2010txtpi1209.txt ). It should be noted that although the personal savings rate has vacillated recentlymdashperhaps as a result of increased debt repayment during the recent economic downturn (Mui 2010)mdashpersonal savings in the United States has declined over the past few decades and remains lower than in many modern nations (Jones 2010). ensp3 See Viceira (2007) for a recent review. ensp4 Of the 21 million participants in the sample, these individuals held above-average account balances. ensp5 For example, Mymoney. gov. a website sponsored by the U. S. Financial Literacy and Education Commission, provides information on saving and investing, retirement planning, and paying for education. The Jumptart Coalition for Personal Financial Literacy (jumpstartcoalition. org ) targets young Americans and strives to promote curriculum-based financial education for students in grades Kndash12. The Social Security Administration (SSA ) has recently announced a multidisciplinary research and development initiative called the Financial Literacy Research Consortium to educate the public on retirement savings and planning. ensp6 See Camerer and Weber (1992) for a review. ensp7 The reported overlap between self-assessed and objectively measured financial literacy was between 50 percent and 66 percent. Lusardi and Mitchell (2007, 12) interpret this as a quotstrong positive correlationquot between the two measures. ensp8 One particular example is the quotBallpark Etimatequot online calculator, a feature of EBRI s Choose to Save program (choosetosave. orgballpark ). ensp9 Tversky and Kahneman (1973, 1974) first applied the concept of heuristics to the domain of judgment under uncertainty to describe the way individuals assess probabilities and estimate values. They demonstrated that decision makers attempt to reduce complex estimation problems into simpler terms through the use of various rules of thumb. More recently, decision-making researchers have expanded the notion of heuristics to domains other than probability and value estimation. As such, the concept of the heuristic has come to broadly describe judgments made quickly and with limited knowledge, time, or cognitive capacity (Gigerenzer and Todd 1999). There is much controversy in the JDM literature concerning exactly what constitutes a quotheuristicquot (for example, Oppenheimer 2003 Newell 2005), but a discussion of that debate is beyond the scope of this article. 10 Even experts, who, by definition, possess a great deal of knowledge in their respective areas of expertise, fall prey to judgment errors when relying on heuristics (for example, Northcraft and Neale 1987 Tversky and Kahneman 1971). In fact, errors in experts decision making are often attributed to overreliance on judgmental heuristics when solving problems in their areas of expertise (Shanteau and Stewart 1992 Slovic, Fischhoff, and Lichtenstein 1985). 11 For more recent research exploring the impact of the availability heuristic on financial decisions, see Lee, OBrien, and Sivaramakrishnan (2008), Kilger and Kudryavtsev (2010), and Semenov (2009). 12 Recently, researchers have begun to explore the relationship between heuristic-based, System 1 processing and cognitive ability (see Stanovich and West (2008) for a thorough review of the findings). Results are mixed as to whether cognitive ability attenuates judgmental biases resulting from the use of heuristics and System 1 processing, but there is evidence suggesting that cognitive ability and quotthinking biasesquot are often uncorrelated. Stanovich and West present a framework for identifying when cognitive ability is and is not likely to attenuate System 1-induced judgmental biases. 13 Of course, the benefit of life-cycle funds is contingent upon investors using them properly. However, a 2005 report by Vanguard showed that a significant percentage (71 percent) of Vanguards life-cycle fund participants did not utilize the funds as intended. Rather than using the funds as quotone-stop shopping, quot most life-cycle fund investors incorporated life-cycle funds into their overall portfolios as they would other funds. About half of Vanguards life-cycle fund investors held a life-cycle fund in combination with at least one other investment option. Another third of the investors held multiple life-cycle funds, rather than a single one (Vanguard 2005). A more recent report showed a similar lack of understanding of target-date funds among 401(k) investors (Park 2009). 14 Research has mainly observed the status quo bias and default effects in inexperienced participants, that is, individuals who were not necessarily known to have had experience or expertise in the domain in question. It is possible that these effects would be less pronounced for experienced individuals or experts (Kempf and Ruenzi 2006). Only a few studies have addressed the attenuation of default effects in more knowledgeable individuals results are mixed as to whether or not experience in a particular domain reduces the default effect (for example, Brown and Krishna 2004 Loumlfgren and others 2009) or does not (for example, Johnson, Bellman, and Lohse 2002). 15 Some research on the effects of an employer match on 401(k) participation has shown that the presence of a match does increase employee participation in retirement plans (for example, Investment Company Institute 2006), while other research seems to indicate that an employer match only modestly affects employees savings behavior (Mitchell, Utkus, and Yang 2005). Furthermore, previous research has also shown that many employees fail to take full advantage of matching opportunities (for example, Thaler and Sunstein 2008), thereby leaving matching contributions quoton the tablequot (Choi, Laibson, and Madrian 2005, 14). 16 Of course, low participation in IRA s relative to 401(k) plans may have a number of causes. For an overview of such determinants, see Springstead and Wilson (2000). 17 Automatic IRA s may also succeed in part because of procrastination, in that individuals who intend to opt out of the plan may procrastinate and remain enrolled, all the while accumulating retirement funds. 18 Critics of certain aspects of automatic IRA s have argued that such IRA s should feature a forced quotrolloverquot provision because many individuals with automatic IRA s would be low-wage earners, work in temporary jobs, or change jobs frequently (Munnell and Quinby 2009 PRC 2007). Without a rollover provision, the small amount of money accumulated in the IRA associated with each job would likely be cashed out (Munnell and Sundeacuten 2006), preventing the significant accumulation of funds and defeating the purpose of the automatic IRA . 19 See Frederick, Loewenstein, and ODonoghue (2002) for a thorough review of the literature. 20 Christmas clubs are illiquid, zero-interest savings accounts into which individuals can deposit funds throughout the year so that they will have money with which to shop during the holiday season. 21 See Loewenstein and ODonoghue (2005) for a detailed discussion of how emotions affect financial decisions in other ways, for example, their effects on risk perception and social preferences. See also Rick and Loewenstein (2008) for a description of how emotions can enter the decision process at various times. 22 Of course, immediate emotions need not result in negative behaviors, nor must expected emotions result in positive ones. For example, feeling full while grocery shopping may lead a dieter to purchase fewer unhealthy items for the upcoming week, and considering how one will feel if she misses a one-day sale may make a shopper spend money unnecessarily. 23 See Wilson and Gilbert (2003) for a review of the literature. 24 The authors estimate that people mispredict their future tastes by approximately one-third to one-half of the difference between future and current tastes. 25 As an example, Wal-Mart recently changed its slogan from quotAlways Low Pricesquot to quotSave Money. Live Better. quot Television commercials featuring this new slogan suggest that saving small amounts of money on everyday purchases can add up to significant amounts of money over the course of a year. In a similar vein, Bank of Americas quotKeep the Changequot promotion rounds up debit card transactions to the nearest dollar and transfers the difference into customers savings accounts. Customers enrolled in the quotKeep the Changequot program can track the funds acquired through this system and see how the small amounts of change accumulate over time. 26 The principle of invariance is described as extentionality in Arrow (1982). 27 It is important to note that the authors did find some factors that moderated the name-order effect. Specifically, elections in counties whose residents were less educated showed greater effects of name order, as did those in which there were indicators (such as less media coverage of races) that voters knew less about the candidates. This particular set of moderators suggests that making more information available to voters may attenuate the name-order effect. 28 Of course, taking a portion of the employer match to fund the purchase of tangible goods would necessarily reduce the amount the employer contributes to employees savings. However, the idea is that the increased incidence of employee saving that results from the point incentive more than compensates for the reduced employer match. That is, although the employer match would be lower with a points system than without it, the intervention would encourage more employees to contribute a larger percentage of their paychecks to retirement savings. 29 See also Zeelenberg and Pieters (2004). 30 For an overview of mental accounting, see Thaler (1999). 31 However, Heath, Larrick, and Wu (1999) demonstrate how individuals use goals as reference points. References Agnew, Julie R. and Lisa R. Szykman. 2005. Asset allocation and information overload: The influence of information display, asset choice, and investor experience. The Journal of Behavioral Finance 6(2): 57ndash70 . Alicke, Mark D. M. L. Klotz, David L. Breitenbecher, Tricia J. Yurak, and Debbie S. Vredenburg. 1995. Personal contact, individuation, and the better-than-average effect. Journal of Personality and Social Psychology 68(5): 804ndash825 . Angner, Erik, and George Loewenstein. 2007. Behavioral economics. Available at ssrnabstract957148 . Arkes, Hal R. David Hirshleifer, Danling Jiang, and Sonya Seongyeon Lim. 2008. Reference point adaptation: Tests in the domain of security trading. Organizational Behavior and Human Decision Processes 105(1): 67ndash81 . Arrow, Kenneth J. 1982. Risk perception in psychology and economics. Economic Inquiry 20(1): 1ndash9 . Baron, Jonathan. 1992. The effect of normative beliefs on anticipated emotions. Journal of Personality and Social Psychology 63(2): 320ndash330 . Becker, Gary S. 1962. Irrational behavior and economic theory. The Journal of Political Economy 70(1): 1ndash13 . Benartzi, Shlomo, and Richard H. Thaler. 1995. Myopic loss-aversion and the equity premium puzzle. Quarterly Journal of Economics 110(1): 73ndash92 . mdashmdashmdash. 2007. Heuristics and biases in retirement savings behavior. The Journal of Economic Perspectives 21(3): 81ndash104 . Brown, Christina L. and Aradhna Krishna. 2004. The skeptical shopper: A metacognitive account for the effects of default options on choice. Journal of Consumer Research 31(3): 529ndash539 . Camerer, Colin, and Martin Weber. 1992. Recent developments in modeling preferences: Uncertainty and ambiguity. Journal of Risk and Uncertainty 5(4): 325ndash370 . CFA BOA. See Consumer Federation of AmericaBank of America. Choi, James J. David Laibson, and Brigitte C. Madrian. 2005. 100 bills on the sidewalk: Suboptimal investment in 401(k) plans. NBER Working Paper No. 11554. Cambridge, MA. National Bureau of Economic Research. Available at nber. orgpapersw11554 . Choi, James J. David Laibson, Brigitte C. Madrian, and Andrew Metrick. 2004. For better or worse: Default effects and 401(k) savings behavior. In Perspectives on the economics of aging . Ed. D. A. Wise, 81ndash126. Chicago, IL. University of Chicago Press. Combs, B. and Paul Slovic. 1979. Causes of death: Biased newspaper coverage and biased judgments. Journalism Quarterly 56(4): 837ndash843 . Conlin, Michael, Ted ODonoghue, and Timothy J. Vogelsang. 2007. Projection bias in catalogue orders. American Economic Review 97(4): 1217ndash1249 . Consumer Federation of AmericaBank of America. 2001. Most Americans have built little wealth. Available at americasaves. org downloads americasaves. org PressReleases 02.20.01.pdf. DeWitt, Larry. 1996. Research Note 1: Origins of the three-legged stool metaphor for Social Security. Research Notes and Special Studies by the Historians Office. Baltimore, MD. SSA. Available at socialsecurity. govhistorystool. html . EBRI. See Employee Benefit Research Institute. Employee Benefit Research Institute. 2007. Retirement trends in the United States over the past quarter-century. Available at ebri. orgpdfpublicationsfacts0607fact. pdf . Epley, Nicholas, and Ayelet Gneezy. 2007. The framing of financial windfalls and implications for public policy. Journal of Socio-Economics 36(1) 36ndash47 . Epley, Nicholas, Dennis Mak, and Lorraine Chen Idson. 2006. Bonus or rebate. The impact of income framing on spending and saving. Journal of Behavioral Decision Making 19(3): 213ndash227 . Fagerlin, Angela, Catharine Wang, and Peter A. Ubel. 2005. Reducing the influence of anecdotal reasoning on peoples health care decisions: Is a picture worth a thousand statistics Medical Decision Making 25(4): 398ndash405 . Fishburn, Peter C. and Ariel Rubenstein. 1982. Time preference. International Economic Review 23(3): 677ndash694 . Fox, Craig R. and Amos Tversky. 1995. Ambiguity aversion and comparative ignorance. Quarterly Journal of Economics 110(3): 585ndash603 . Fox, Craig R. and Martin Weber. 2002. Ambiguity aversion, comparative ignorance, and decision context. Organizational Behavior and Human Decision Processes 88(1): 476ndash498 . Frederick, Shane, George Loewenstein, and Ted ODonoghue. 2002. Time discounting and time preference: A critical review. Journal of Economic Literature 40(2): 351ndash401 . Gigerenzer, Gerd. 2008. Why heuristics work. Perspectives on Psychological Science 3(1): 20ndash29 . Gigerenzer, Gerd, and Peter M. Todd. 1999. Fast and frugal heuristics: The adaptive toolbox. In Simple heuristics that make us smart, eds. Gerd Gigerenzer, Peter M. Todd, and the ABC Group, 3ndash34. New York, NY. Oxford University Press. Gilbert, Daniel T. 2002. Inferential correction. In Heuristics and biases: The psychology of intuitive thought, eds. Thomas Gilovich, Dale Griffin, and Daniel Kahneman, 167ndash184. New York, NY. Cambridge University Press. Gilbert, Daniel T. Elizabeth C. Pinel, Timothy D. Wilson, Stephen J. Blumberg, and Thalia P. Wheatley. 1998. Immune neglect: A source of durability bias in affective forecasting. Journal of Personality and Social Psychology 75(3): 617ndash638 . 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Preference and belief: Ambiguity and competence in choice under uncertainty. Journal of Risk and Uncertainty 4(1): 5ndash28 . Hogarth, Robin M. 1993. Accounting for decisions and decisions for accounting. Accounting, Organizations and Society 18(5): 407ndash424 . Hutton, Robert J. B. and Gary Klein. 1999. Expert decision making. Systems Engineering 2(1): 32ndash45 . Investment Company Institute. 2006. 401(k) plans: A 25-year retrospective. Available at ici. orgpdfper12-02.pdf . Iwry, J. Mark, and David C. John. 2009. Pursuing universal retirement security through automatic IRA s. Retirement Security Project Policy Brief No. 2009-3. Available at brookings. edupapers200907automaticiraiwry. aspx . Jenni, Karen E. and George Loewenstein. 1997. Explaining the quotidentifiable victim effect. quot Journal of Risk and Uncertainty 14(3): 235ndash257 . Johnson, Eric J. Steven Bellman, and Gerald L. Lohse. 2002. Defaults, framing and privacy: Why opting in-opting out. Marketing Letters 13(1): 5ndash15 . Johnson, Eric J. and Daniel Goldstein. 2003. Do defaults save lives Science 302(5649): 1338ndash1339 . Johnson, Eric J. John C. Hershey, Jacqueline Meszaros, and Howard Kunreuther. 1993. Framing, probability distortions, and insurance decisions. Journal of Risk and Uncertainty 7(1): 35ndash51 . Kahneman, Daniel. 1991. Judgment and decision making: A personal view. Psychological Science 2(3): 142ndash145 . mdashmdashmdash. 2003. Maps of bounded rationality: Psychology for behavioral economics. The American Economic Review 93(5): 1449ndash1475 . Kahneman, Daniel, and Amos Tversky. (1979). Prospect theory: An analysis of decision under risk. Econometrica 47(2): 267ndash291 . mdashmdashmdash. 1984. Choices, values, and frames. American Psychologist 39(4): 341ndash350 . Kempf, Alexander, and Stefan Ruenzi. 2006. Status quo bias and the number of alternatives: An empirical illustration from the mutual fund industry. 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Oxford: Oxford University Press. Loewenstein, George, and Ted ODonoghue. 2005. Animal spirits: Affective and deliberative processes in human behavior. Unpublished manuscript, Cornell University. Loewenstein, George, Ted ODonoghue, and Matthew Rabin. 2003. Projection bias in predicting future utility. Quarterly Journal of Economics 118(4): 1209ndash1248 . Loewenstein, George F. Elke U. Weber, Christopher K. Hsee, and Ned Welch. 2001. Risk as feelings. Psychological Bulletin 127(2): 267ndash286 . Loumlfgren, Aringsa. Peter Martinsson, Magnus Hennlock, and Thomas Sterner. 2009. Does experience eliminate the effect of a default option A field experiment on CO2 - offsetting for air transport. University of Gothenburg School of Business, Economics and Law Working Paper in Economics No. 391. Available at gupea. ub. gu. sedspacebitstream2077213151gupea2077213151.pdf . Lusardi, Annamaria, and Olivia S. Mitchell. 2005. Financial literacy and planning: Implications for retirement wellbeing. Working Paper No. WP 2005-108. Ann Arbor, MI. University of Michigan Retirement Research Center. Available at mrrc. isr. umich. edupublicationspaperspdfwp108.pdf . mdashmdashmdash. 2007. Financial literacy and retirement planning: New evidence from the Rand American Life Panel. Working Paper No. WP 2007-157. Ann Arbor, MI. University of Michigan Retirement Research Center. Available at mrrc. isr. umich. edupublicationspaperspdfwp157.pdf . Madrian, Brigitte C. and Dennis F. Shea. 2001. The power of suggestion: Inertia in 401(k) participation and savings behavior. Quarterly Journal of Economics 116(4): 1149ndash1187 . McClure, Samuel M. David I. Laibson, George Loewenstein, and Jonathan D. Cohen. 2004. Separate neural systems value immediate and delayed monetary rewards. Science 306(5695): 503ndash507 . Mehra, Rajnish, and Edward C. Prescott. 1985. The equity premium: A puzzle. Journal of Monetary Economics 15(2): 145ndash161 . Miller, Joanne M. and Jon A. Krosnick. 1998. 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Issue Brief No. 9-26. Boston, MA. Center for Retirement Research at Boston College. Available at crr. bc. eduimagesstoriesBriefsib9-26.pdf . Munnell, Alicia H. and Annika E. Sundeacuten. 2006. 401(k) plans are still coming up short. Issue Brief No. 43. Boston, MA. Center for Retirement Research at Boston College. Available at crr. bc. eduimagesstoriesBriefsib43.pdf . National Institute on Aging. 2007. Growing older in America: The Health and Retirement Study . NIH Publication No. 07- 5757. Bethesda, MD. NIA. Available at nia. nih. govNRrdonlyresD164FE6C-C6E0-4E78-B27F-7E8D8C0FFEE50HRSTextWEB. pdf . Newell, Ben R. 2005. Re-visions of rationality. Trends in Cognitive Sciences 9(1): 11ndash15 . NIA. See National Institute on Aging. Northcraft, Gregory B. and Margaret A. Neale. 1987. Experts, amateurs, and real estate: An anchoring-and-adjustment perspective of property pricing decisions. Organizational Behavior and Human Decision Processes 39(1): 84ndash97 . OConnor, Kathleen M. Carsten K. W. deDreu, Holly Schroth, Bruce Barry, Terri Lituchy, and Max H. Bazerman. 2002. What we want to do versus what we think we should do: An empirical investigation of intrapersonal conflict . Journal of Behavioral Decision Making 15(5): 403ndash418 . Odean, Terrance. 1998. Are investors reluctant to realize their losses The Journal of Finance 53(5): 1775ndash1798 . Olsen, Anya, and Kevin Whitman. 2007. Effective retirement savings programs: Design features and financial education. Social Security Bulletin 67(3): 53ndash72 . Olsen, Robert A. 1997. Prospect theory as an explanation of risky choice by professional investors: Some evidence. Review of Financial Economics 6(2): 225ndash233 . Oppenheimer, Daniel M. 2003. Not so fast (and not so frugal): Rethinking the recognition heuristic. Cognition 90(1): B1ndashB9. Park, Youngkyun. 2009. Investment behavior of target-date fund users having other funds in 401(k) plan accounts. EBRI Notes 30(12): 2ndash11. Washington, DC. Employee Benefit Research Institute. Available at ebri. orgpdfnotespdfEBRINotes12-Nov09.TDFs. pdf. PRC Pension Rights Center. 2007. Covering the uncovered: Final report of the conversation on coverage. Washington, DC. PRC. Available at conversationoncoverage. orgaboutfinal-reportcovering-the-uncovered. pdf . Price, Paul C. 1994. Installment framing: The mental aggregation and disaggregation of monetary cost over time. Poster presented at the meeting of the Society for Judgment and Decision Making, St. Louis, MO (November). Rabin, Mathew. 2002. A perspective on psychology and economics. European Economic Review 46( 4ndash5 ): 657ndash685 . Rabin, Matthew, and Richard H. Thaler. 2001. Anomalies: Risk aversion. The Journal of Economic Perspectives 15(1): 219ndash232 . Raghunathan, Rajagopal, and Michel Tuan Pham. 1999. All negative moods are not equal: Motivational influences of anxiety and sadness on decision making. Organizational Behavior and Human Decision Processes 79(1): 56ndash77 . Read, Daniel, George Loewenstein, and Matthew Rabin. 1999. Choice bracketing. Journal of Risk and Uncertainty 19( 1ndash3 ): 171ndash197 . Rick, Scott, and George Loewenstein. 2008. The role of emotion in economic behavior. In Handbook of emotions, third edition, eds. Michael Lewis, Jeannette M. Haviland-Jones, and Lisa Feldman Barrett, 138ndash158. New York, NY. The Guilford Press. Samuelson, William, and Richard Zeckhauser. 1988. Status quo bias in decision making. Journal of Risk and Uncertainty 1(1): 7ndash59 . Schooley, Diane K. and Deborah Drecnik Worden. 1999. Investors asset allocations versus life-cycle funds. Financial Analysts Journal 55(5): 37ndash43 . Semenov, Andrei. 2009. Departures from rational expectations and asset pricing anomalies. Journal of Behavioral Finance 10(4): 234ndash241 . Shanteau, James. 1988. Psychological characteristics and strategies of expert decision makers. Acta Psychologica 68( 1ndash3 ): 203ndash215 . Shanteau, James, and Thomas R. Stewart. 1992. Why study expert decision making Some historical perspectives and comments. Organizational Behavior and Human Decision Processes 53(2): 95ndash106 . Shapiro, Matthew D. and Joel Slemrod. 2003a. Consumer response to tax rebates. American Economic Review 93(1): 381ndash396 . mdashmdashmdash. 2003b. Did the 2001 tax rebate stimulate spending Evidence from taxpayers surveys. In Tax policy and the economy, vol. 17, ed. James M. Poterba, 83ndash110. Cambridge, MA. MIT Press. Shefrin, Hersh, and Meir Statman. 1985. The disposition to sell winners too early and ride losers too long: Theory and evidence. Journal of Finance 40(3): 777ndash790 . Shiv, Baba, and Alexander Fedorikhin. 1999. Heart and mind in conflict: The interplay of affect and cognition in consumer decision making. Journal of Consumer Research 26(3): 278ndash292 . Simon, Herbert A. 1959. Theories of decision-making in economics and behavioral science. American Economic Review 49(3): 253ndash283 . Slovic, Paul, Baruch Fischhoff, and Sarah Lichtenstein. 1985. Regulation of risk: A psychological perspective. In Regulatory policy and the social sciences . Ed. Roger G. Noll, 241ndash277. Berkeley, CA. University of California Press. Social Security Administration. 2009. Special insert for workers 25ndash35. What young workers should know about Social Security and saving. Available at socialsecurity. govmystatementinsert25pg1.htm. Springstead, Glenn R. and Theresa M. Wilson. 2000. Participation in voluntary individual savings accounts: An analysis of IRA s, 401(k) s and the TSP. Social Security Bulletin 63(1): 34ndash49 . SSA. See Social Security Administration. Stanovich, Keith E. and Richard F. West. 2000. Individual differences in reasoning: Implications for the rationality debate Behavioral and Brain Sciences 23(5): 645ndash665 . mdashmdashmdash. 2008. On the relative independence of thinking biases and cognitive ability. Journal of Personality and Social Psychology 94(4): 672ndash695 . Thaler, Richard H. 1990. Anomalies: Saving, fungibility, and mental accounts. Journal of Economic Perspectives 4(1): 193ndash205 . mdashmdashmdash. 1999. Mental accounting matters. Journal of Behavioral Decision Making 12(3): 183ndash206 . Thaler, Richard H. and Shlomo Benartzi. 2004. Save more tomorrow: Using behavioral economics to increase employee saving. Journal of Political Economy 112(S1): S164ndashS187. Thaler, Richard H. and Eric J. Johnson. 1990. Gambling with the house money and trying to break even: The effects of prior outcomes on risky choice. Management Science 36(6): 643ndash660 . Thaler, Richard H. and Hersh M. Shefrin. 1981. An economic theory of self-control. Journal of Political Economy 89(2): 392ndash406 . Thaler, Richard H. and Cass R. Sunstein. 2003. Libertarian paternalism. American Economic Review 93(2): 173ndash179 . mdashmdashmdash. 2008. Nudge: Improving decisions about health, wealth, and happiness. New Haven, CT. Yale University Press. Tversky, Amos, and Daniel Kahneman. 1971. The belief in the law of small numbers. Psychological Bulletin 76(2): 105ndash110 . mdashmdashmdash. 1973. Availability: A heuristic for judging frequency and probability. Cognitive Psychology 5(2): 207ndash232 . mdashmdashmdash. 1974. Judgment under uncertainty: Heuristics and biases. Science 185(4157): 1124ndash1131 . mdashmdashmdash. 1981. The framing of decisions and the psychology of choice. Science 211(4481): 453ndash458 . mdashmdashmdash. 1986. Rational choice and the framing of decisions. Journal of Business (59): S251ndashS278. mdashmdashmdash. 1991. Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics 106(4): 1039ndash1061 . Ubel, Peter A. Christopher Jepson, and Jonathan Baron. 2001. The inclusion of patient testimonials in decision aids: Effects on treatment choices. Medical Decision Making 21(1): 60ndash68 . van Rooij, Maarten, Annamaria Lusardi, and Rob Alessie. 2007. Financial literacy and stock market participation. Working Paper No. 2007-162. Ann Arbor, MI. University of Michigan Retirement Research Center. Available at mrrc. isr. umich. edupublicationspaperspdfwp162.pdf . VanDerhei, Jack. 2009. The impact of the recent financial crisis on 401(k) account balances. EBRI Issue Brief No. 326. Washington, DC. Employee Benefit Research Institute. Available at ebri. orgpdfbriefspdfEBRIIB2-2009Crisis-Impct. pdf . Vanguard. 2005. How America saves 2005: A report on Vanguard 2004 defined contribution plan data. Valley Forge, PA. The Vanguard Group. Available at institutional. vanguardiippdfCRRHAS2005.pdf. von Neumann, John, and Oskar Morgenstern. 1944. Theory of games and economic behavior. Princeton, NJ. Princeton University Press. Wilson, Timothy D. and Daniel T. Gilbert. 2003. Affective forecasting. Advances in Experimental Social Psychology 35: 345ndash411 . Yogo, Motohiro. 2008. Asset prices under habit formation and reference-dependent preferences. Journal of Business Economic Statistics 26(2): 131ndash143 . Zeelenberg, Marcel. 1999. Anticipated regret, expected feedback and behavioral decision-making. Journal of Behavioral Decision Making 12(2): 93ndash106 . Zeelenberg. Marcel, and Rik Pieters. 2004. Consequences of regret aversion in real life: The case of the Dutch postcode lottery. Organizational Behavior and Human Decision Processes 93(2): 155ndash168 . Important Information:
Estou tentando calcular a média móvel de um sinal. O valor do sinal (um duplo) é atualizado em horários aleatórios. Estou procurando uma maneira eficiente de calcular sua média ponderada no tempo ao longo de uma janela de tempo, em tempo real. Eu poderia fazê-lo sozinho, mas é mais desafiante do que eu pensava. A maioria dos recursos que encontrei através da internet calculam a média móvel do sinal periódico, mas as atualizações das minas em tempo aleatório. Alguém conhece bons recursos para isso. O truque é o seguinte: você obtém atualizações em horários aleatórios através de atualização vazia (tempo int, valor flutuante). No entanto, você também precisa acompanhar quando uma atualização cai na janela de tempo, de modo que você configure um alarme chamado no momento N, que remove a atualização anterior de ser novamente considerado novamente na computação. Se isso acontecer em tempo real, você pode solicitar o sistema operacional para fazer uma chamada para um método void dropoffoldest...
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