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Getting to the Top of Mind: How Reminders Increase Saving

Author

Listed:
  • Dean Karlan

    (Department of Economics, Yale University, New Haven, Connecticut 06520)

  • Margaret McConnell

    (Department of Global Health and Population, Harvard T.H. Chan School of Public Health, Boston, Massachusetts 02115)

  • Sendhil Mullainathan

    (Department of Economics, Harvard University, Cambridge, Massachusetts 02138)

  • Jonathan Zinman

    (Department of Economics, Dartmouth College, Hanover, New Hampshire 03755)

Abstract

We provide evidence from field experiments with three different banks that reminder messages increase commitment attainment for clients who recently opened commitment savings accounts. Messages that mention both savings goals and financial incentives are particularly effective, whereas other content variations such as gain versus loss framing do not have significantly different effects. Nor do we find evidence that receiving additional late reminders has an additive effect. These empirical results do not map neatly into existing models, so we provide a simple model where limited attention to exceptional expenses can generate undersaving that is in turn mitigated by reminders.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2296 . This paper was accepted by Teck-Hua Ho, behavioral economics .

Suggested Citation

  • Dean Karlan & Margaret McConnell & Sendhil Mullainathan & Jonathan Zinman, 2016. "Getting to the Top of Mind: How Reminders Increase Saving," Management Science, INFORMS, vol. 62(12), pages 3393-3411, December.
    • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:12:p:3393-3411
    DOI: 10.1287/mnsc.2015.2296
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    More about this item

    Keywords

    economics: microeconomic behavior; behavior and behavioral decision making; finance;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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