The Effect of Providing Peer Information on Retirement Savings Decisions
We conducted a field experiment in a 401(k) plan to measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of non-participants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.
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Document Object Identifier (DOI): 10.3386/w17345
Published: JOHN BESHEARS & JAMES J. CHOI & DAVID LAIBSON & BRIGITTE C. MADRIAN & KATHERINE L. MILKMAN, 2015. "The Effect of Providing Peer Information on Retirement Savings Decisions," The Journal of Finance, vol 70(3), pages 1161-1201. citation courtesy of
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