TY  - JOUR
AU  - Mitchell,Olivia S.
AU  - Mottola,Gary R.
AU  - Utkus,Stephen P.
AU  - Yamaguchi,Takeshi
TI  - Default, Framing and Spillover Effects:  The Case of Lifecycle Funds in 401(k) Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15108
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15108
L1  - http://www.nber.org/papers/w15108.pdf
N1  - Author contact info:
Olivia S. Mitchell
University of Pennsylvania
Wharton School
3620 Locust Walk, St 3000 SH-DH
Philadelphia, PA 19104-6302
Tel: 215-898-0424
Fax: 215/898-0310
E-Mail: mitchelo@wharton.upenn.edu

Gary R. Mottola
Vanguard Center for Retirement Research
100 Vanguard Boulevard, M38
Malvern, PA  19355
E-Mail: gmottola@vanguard.com

Stephen Utkus
Vanguard Center for Retirement Research
100 Vanguard Boulevard, M38
Malvern, PA  19355
E-Mail: steve_utkus@vanguard.com

Takeshi Yamaguchi
Wharton School,Univ. of Pennsylvania
3620 Locust Walk, St 3000 SH-DH
Philadelphia, PA 19104-6302
E-Mail: tyamaguc@wharton.upenn.edu
AB  - Important behavioral factors such as default and framing effects are increasingly being employed to optimize decision-making in a variety of settings, including individually-directed retirement plans. Yet such approaches may have unintended “spillover” effects, as we show with regard to the introduction of lifecycle funds in U.S. 401(k) plans. As anticipated, lifecycle funds do reshape individual portfolio choices through large default and framing effects. But unexpectedly, they also create a new class of investors which holds these funds as part of more complex portfolios. Our results are directly relevant to those interested in retirement plan design and retirement security; they also highlight the importance of assessing such spillover effects in other consequential settings where behavioral economics techniques may be employed.
ER  -