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Getting to theTop of Mind: How Reminders Increase Saving

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  • Dean Karlan

    ()

  • Sendhil Mullainathan
  • Margaret McConnell
  • 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 models of present-bias. Our model also generates the unique predictions that reminders may increase saving, and that reminders will be more effective when they increase the salience of a specific expenditure. We find support for these predictions in three field experiments that randomly assign reminders to new savings account holders.[Working Paper No. 262]

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Bibliographic Info

Paper provided by eSocialSciences in its series Working Papers with number id:2587.

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Date of creation: Jun 2010
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Handle: RePEc:ess:wpaper:id:2587

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Keywords: IntertemporalConsumerChoice; Savings; Attention;

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References

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  1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2011. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," American Economic Review, American Economic Association, vol. 101(6), pages 2350-90, October.
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  4. Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S164-S187, February.
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  8. N. Gregory Mankiw & Ricardo Reis, 2001. "Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," Harvard Institute of Economic Research Working Papers 1922, Harvard - Institute of Economic Research.
  9. Nava Ashaf & Dean Karlan & Wesley Yin, 2006. "Deposit collectors," Natural Field Experiments 00205, The Field Experiments Website.
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  13. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-72, June.
  14. 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.
  15. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
  16. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
  17. Nava Ashraf & Dean S. Karlan & Wesley Yin, 2005. "Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines," Working Papers 917, Economic Growth Center, Yale University.
  18. Brigitte C. Madrian & Dennis F. Shea, 2001. "THE POWER OF SUGGESTION: INERTIA IN 401(k) PARTICIPATION AND SAVINGS BEHAVIOR," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1149-1187, November.
  19. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-77, September.
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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
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Cited by:
  1. 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.
  2. 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.
  3. 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.
  4. Victor Stango & Jonathan Zinman, 2011. "Limited and Varying Consumer Attention: Evidence from Shocks to the Salience of Bank Overdraft Fees," NBER Working Papers 17028, National Bureau of Economic Research, Inc.
  5. Altmann, Steffen & Traxler, Christian, 2012. "Nudges at the Dentist," IZA Discussion Papers 6699, Institute for the Study of Labor (IZA).
  6. Pascaline Dupas & Jonathan Robinson, 2011. "Why Don't the Poor Save More? Evidence from Health Savings Experiments," NBER Working Papers 17255, National Bureau of Economic Research, Inc.
  7. B. Douglas Bernheim & Andrey Fradkin & Igor Popov, 2011. "The Welfare Economics of Default Options: A Theoretical and Empirical Analysis of 401(k) Plans," NBER Working Papers 17587, National Bureau of Economic Research, Inc.
  8. 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.

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