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Getting to the Top of Mind: How Reminders Increase Saving

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  • Dean Karlan
  • Margaret McConnell
  • Sendhil Mullainathan
  • Jonathan Zinman

Abstract

We develop and test a simple model of limited attention in intertemporal choice. The model posits that individuals fully attend to consumption in all periods but fail to attend to some future lumpy expenditure opportunities. This asymmetry generates some predictions that overlap with other models of present-bias. Our model also generates the unique predictions that reminders will increase saving, and that a reminder that makes a specific expenditure more salient will be especially effective. We find support for these predictions in three field experiments that randomly assign reminders to new savings account holders.

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Bibliographic Info

Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2010-2.

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Length: 43 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:crr:crrwps:wp2010-2

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References

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  2. Nava Ashraf & Dean Karlan & Wesley Yin, 2005. "Deposit Collectors," Working Papers 930, Economic Growth Center, Yale University.
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  12. Robinson, Jonathan & Dupas, Pascaline, 2009. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," Santa Cruz Department of Economics, Working Paper Series qt34w0w53t, Department of Economics, UC Santa Cruz.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Nudge Database IV
    by Mark Egan in Economics, Psychology and Policy on 2013-04-14 16:17:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Victor Stango & Jonathan Zinman, 2011. "Limited and varying consumer attention: evidence from shocks to the salience of bank overdraft fees," Working Papers 11-17, Federal Reserve Bank of Philadelphia.
  2. Englmaier, Florian & Roider, Andreas & Sunde, Uwe, 2012. "The Role of Salience in Performance Schemes: Evidence from a Field Experiment," IZA Discussion Papers 6448, Institute for the Study of Labor (IZA).
  3. Pascaline Dupas & Jonathan Robinson, 2013. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," American Economic Review, American Economic Association, vol. 103(4), pages 1138-71, June.
  4. Calzolari, Giacomo & Nardotto, Mattia, 2011. "Nudging with information: a randomized field experiment on reminders and feedback," CEPR Discussion Papers 8571, C.E.P.R. Discussion Papers.
  5. Michael Hamp & Carolina Laureti, 2011. "Balancing flexibility and discipline in microfinance: Innovative financial products that benefit clients and service providers," Working Papers CEB 11-044, ULB -- Universite Libre de Bruxelles.
  6. Karlan, Dean & Morten, Melanie & Zinman, Jonathan, 2012. "A Personal Touch: Text Messaging for Loan Repayment," Working Papers 102, Yale University, Department of Economics.
  7. B. Douglas Bernheim & Andrey Fradkin & Igor Popov, 2011. "The Welfare Economics of Default Options in 401(k) Plans," NBER Working Papers 17587, National Bureau of Economic Research, Inc.
  8. Steffen Altmann & Christian Traxler, 2012. "Nudges at the Dentist," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_15, Max Planck Institute for Research on Collective Goods.
  9. Buehren, Niklas, 2011. "Allocating Cash Savings and the Role of Information: Evidence from a Field Experiment in Uganda," Proceedings of the German Development Economics Conference, Berlin 2011 16, Verein für Socialpolitik, Research Committee Development Economics.
  10. Brune, Lasse & Gine, Xavier & Goldberg, Jessica & Yang, Dean, 2011. "Commitments to save : a field experiment in rural Malawi," Policy Research Working Paper Series 5748, The World Bank.
  11. James J. Choi & Emily Haisley & Jennifer Kurkoski & Cade Massey, 2012. "Small Cues Change Savings Choices," NBER Working Papers 17843, National Bureau of Economic Research, Inc.
  12. Pascaline Dupas & Sarah Green & Anthony Keats & Jonathan Robinson, 2012. "Challenges in Banking the Rural Poor: Evidence from Kenya's Western Province," NBER Working Papers 17851, National Bureau of Economic Research, Inc.
  13. Dena Ringold & Alaka Holla & Margaret Koziol & Santhosh Srinivasan, 2012. "Citizens and Service Delivery : Assessing the Use of Social Accountability Approaches in the Human Development Sectors," World Bank Publications, The World Bank, number 2377, March.
  14. Miller, Margaret & Reichelstein, Julia & Salas, Christian & Zia, Bilal, 2014. "Can you help someone become financially capable ? a meta-analysis of the literature," Policy Research Working Paper Series 6745, The World Bank.

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