NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Decision-Making Approaches and the Propensity to Default: Evidence and Implications

Jeffrey R. Brown, Anne M. Farrell, Scott J. Weisbenner

NBER Working Paper No. 20949
Issued in February 2015
NBER Program(s):Aging, Public Economics

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.

download in pdf format
   (306 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20949

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

Users who downloaded this paper also downloaded* these:
Ásgeirsdóttir, Corman, Noonan, and Reichman w20950 Lifecycle Effects of a Recession on Health Behaviors: Boom, Bust, and Recovery in Iceland
Benzell, Kotlikoff, LaGarda, and Sachs w20941 Robots Are Us: Some Economics of Human Replacement
Ericson, White, Laibson, and Cohen w20948 Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better than Delay Discounting
Yao and Whalley w20924 The China (Shanghai) Pilot Free Trade Zone: Background, Developments and Preliminary Assessment of Initial Impacts
Chan w21002 The Efficiency of Slacking Off: Evidence from the Emergency Department
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us