NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Anne M. Farrell

Miami University Farmer School of Business
800 East High Street, 3094
Department of Accountancy
Oxford, OH 45056

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Institutional Affiliation: Miami Universiy

NBER Working Papers and Publications

February 2015Decision-Making Approaches and the Propensity to Default: Evidence and Implications
with Jeffrey R. Brown, Scott J. Weisbenner: w20949
This paper examines heterogeneity in the responsiveness to default options in a large state retirement plan, focusing on individuals’ decision-making approaches as well as their economic and demographic characteristics. Using a survey of plan participants, we find that procrastination and the need for cognitive closure are important determinants of the likelihood of default. We also explore an important implication of defaulting – individuals who default are significantly more likely to subsequently express a desire to enroll in a different plan. The desire to change plans is also correlated with numerous economic and decision-making characteristics, including procrastination.

Published: Brown, Jeffrey R. & Farrell, Anne M. & Weisbenner, Scott J., 2016. "Decision-making approaches and the propensity to default: Evidence and implications," Journal of Financial Economics, Elsevier, vol. 121(3), pages 477-495. citation courtesy of

 
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