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Getting to the Top of Mind: How Reminders Increase Saving

Listed author(s):
  • Dean Karlan
  • Margaret McConnell
  • Sendhil Mullainathan
  • Jonathan Zinman

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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File URL: http://crr.bc.edu/working-papers/getting-to-the-top-of-mind-how-reminders-increase-saving/
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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
Handle: RePEc:crr:crrwps:wp2010-2
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  17. S. Dellavigna., 2011. "Psychology and Economics: Evidence from the Field," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
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