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A Laboratory Study of Nudge with Retirement Savings

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  • Dina Tasneem
  • Marine de Montaignac
  • Jim Engle-Warnick
  • Audrey Azerot

Abstract

We report results from an on-line economics experiment that examines the e?ect of nudging retirement savings decisions. In the experiments, participants make decisions in a ?nitely repeated retirement savings game, in which income during working years is uncertain, and retire-ment age is known. Participants, who are household ?nancial decision-makers, are nudged with automatic savings in each period of the game. We ?nd that that the nudge simply replaced nat-ural decision-making observed in the absence of a nudge in this experiment, even to the extent that it resulted in nearly identical inferred decision rules. This surprising result highlights the unpredictability of the e?ect of nudging human behavior.

Suggested Citation

  • Dina Tasneem & Marine de Montaignac & Jim Engle-Warnick & Audrey Azerot, 2018. "A Laboratory Study of Nudge with Retirement Savings," CIRANO Working Papers 2018s-23, CIRANO.
    • Handle: RePEc:cir:cirwor:2018s-23
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    References listed on IDEAS

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    9. Carbone, Enrica & Duffy, John, 2014. "Lifecycle consumption plans, social learning and external habits: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 413-427.
    10. Dina Tasneem & Jim Engle-Warnick, 2018. "Decision Rules for Precautionary and Retirement Savings," CIRANO Working Papers 2018s-22, CIRANO.
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    Cited by:

    1. Duffy, John & Li, Yue, 2019. "Lifecycle consumption under different income profiles: Evidence and theory," Journal of Economic Dynamics and Control, Elsevier, vol. 104(C), pages 74-94.

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    More about this item

    Keywords

    Precautionary Savings; Retirement Savings; Life-cycle Models; Dynamic Optimization; Decision Heuristics; Nudge; Choice Architecture;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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